Seller running into problems with investor

Seller running into problems with investor

Member since 2019 · 34 posts · 20 votes

Not sure where to start.. I guess I’ll start by staying this happened in Texas, and my family lives in Colorado. 

 I was transferred to Texas for work on a two year contract leaving behind my family to persue my career with just my wife and my two dogs. We bought a house and I started work, around mid contract I lost my grandmother and a few months later my grandfather and wow, was that tough being so far from home. It wasn’t until my father got sick did I really just want to drop it all to get home. But around the end of my contract I got a contacted via LinkedIn from one of my former bosses asking if I’d like to come back to Colorado he may have a job for me. Over the course of a few months things intensified and things got promising even had an interview and the messages that followed sounded like I was moving back!! 

 I had to sell the house quickly so I could be ready to go should the offer come through so I called an investor. I just wanted what I owed around 15% less than market and he made the offer. We signed a contract with the following contingentcy, “this contract is contingent on confirmed or written notice of sellers job transfer and move to Denver Colorado, if job transfer and move to Denver Colorado is declined seller has the option to terminate contract free of penalty “. We signed the contract January 9th 2018 and we started packing. Well, to say I was let down when I got the news I didn’t get the job would be a HUGE understatement. So feeling defeated I called the investor and apologized and told him the news and he said it’s fine it happens all the time and not to worry he would handle the house part. This was In February 2018. 

 I flew my father to Texas and he did what most dads do, picked me up and showed me what I was doing this for and said work hard and go places! So I bucked down for the next year I worked hard, lots of overtime and just plain busted my butt got a promotion and im set for another this April things are looking really good for me. I love the company I work for and.. Texas has grown on me too! I love it here and as long as I can get home at least once a year I’m doing great. 

 So with the new promotion and the next one right around the corner I decided it’s time to upgrade my home! I listed it and within 2 days got an offer for 2 grand more than asking price!! I was so excited, spent hours looking for my next home and thinking about how much my life would improve, even found a house with a mother n law suite for dad haha!! It was perfect!!!! 

 Then the news from the title company came. I had a cloud on my title.. I asked what needed to be done to move forward and they said not to worry just call the investor he probably just forgot to remove it. I called the title company that opened the title and they said it was still open however no money had ever made it, no escrow either, but escrow wasn’t even in the contract. 

 So I called the investor, I said hey buddy long time, how have you been. He seemed nervous and I was confused as to why. I said hey remember the deal we made? I think you forgot to close something I’m having a hard time with my title now. He said, are you selling it? I said, YES!! got an amazing deal going to look at new houses tonight with my agent. He said, I’m still willing to buy it, I said, well it just went under contract a few days ago just need you to sign some kind of release. He said.. I’m not signing anything you have to sell to me.. or sue me and hung up. I texted him later that evening and asked if he would please just sign the memo or I’d be forced to get an attorney. He replied,  I will release the title when he’s paid $3462.40.. 

 I started looking through all my contracts and got a copy of the thing that was messing with my title and here’s what I noticed. 

 He, is unlicensed, his wife is licensed. They own an llc and run their deals through it. He sets them up she signs the contracts leaving him completely off of them. But the notarized memorandum of contract is signed by him and is notarized by her.. on the contract it says “principal of buyer is a licensed real estate agent “. 

Is this notary fraud? Also, why would he choose to not close the contract after being told I didn’t get the job and wasn’t relocating? Wouldn’t my contingency kick it? Why do I feel this is a fraudulent deal? 

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Shawn Ackerman:

@Patrick Meade This is not so uncommon.  This cloud achieved exactly what it is intended to do.  He knew that you could not sell the property without his knowledge considering you had a binding contract that was not fulfilled.  You may just want to pay what he is requesting or contact an attorney to review your contract and potentially go through litigation.  In his mind, when you were ready to sell, you would contact him and he'd buy the property.  So instead of asking you to contact him when you are ready to sell he clouded the title.  If you need to sell quickly, make an agreement with him, if not seek an attorney's assistance with the matter.  Not sure about the laws in Texas but you could very well end up paying for the attorney and having to pay him all or a portion of what he is requesting to have the cloud lifted.  All the best.  Persist and you will WIN!!!

this is just sick..  contract says is void if he does not get the job.  this a great case study of what not to do with unlicensed wholesalers that claim they solve problems..  this guy has major liability in my mind.. not only Notary fraud.. but clouding title and causing harm to the seller.  but like you said he knows he can try to extort 3500 out of this seller.. this is why Sellers should NEVER sign contracts with wholesalers or allow them to be notarized  you have to notarize to record them..  thats why these slim balls do this.. just for this exact reason. 

So anyone reading this and of course there wont be many since its innocent people that get taken and they are not on BP .  DO NOT notarize any sale contract with anyone.. its not necessary to be enforceable.. but its necessary to record.  Also clearly denote in your contact that this contract is null and void if it is recorded.  Lastly if you dont have an agent then this is when you need to go to an attorney before you sign anything..  this is just so wrong on so many levels... what a scumbag and people wonder why wholesalers have such a bad wrap..  they come on with the HEY we solve problems  its just BS  total BS

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  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y

    I would file complaints with the broker, with TREC, and with the state before I spend any money on the attorney. You can also pursue an extortion charge.

  • Member since 2019 · 34 posts · 20 votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Shawn Ackerman:

    @Patrick Meade This is not so uncommon.  This cloud achieved exactly what it is intended to do.  He knew that you could not sell the property without his knowledge considering you had a binding contract that was not fulfilled.  You may just want to pay what he is requesting or contact an attorney to review your contract and potentially go through litigation.  In his mind, when you were ready to sell, you would contact him and he'd buy the property.  So instead of asking you to contact him when you are ready to sell he clouded the title.  If you need to sell quickly, make an agreement with him, if not seek an attorney's assistance with the matter.  Not sure about the laws in Texas but you could very well end up paying for the attorney and having to pay him all or a portion of what he is requesting to have the cloud lifted.  All the best.  Persist and you will WIN!!!

    this is just sick..  contract says is void if he does not get the job.  this a great case study of what not to do with unlicensed wholesalers that claim they solve problems..  this guy has major liability in my mind.. not only Notary fraud.. but clouding title and causing harm to the seller.  but like you said he knows he can try to extort 3500 out of this seller.. this is why Sellers should NEVER sign contracts with wholesalers or allow them to be notarized  you have to notarize to record them..  thats why these slim balls do this.. just for this exact reason. 

    So anyone reading this and of course there wont be many since its innocent people that get taken and they are not on BP .  DO NOT notarize any sale contract with anyone.. its not necessary to be enforceable.. but its necessary to record.  Also clearly denote in your contact that this contract is null and void if it is recorded.  Lastly if you dont have an agent then this is when you need to go to an attorney before you sign anything..  this is just so wrong on so many levels... what a scumbag and people wonder why wholesalers have such a bad wrap..  they come on with the HEY we solve problems  its just BS  total BS

     Actually, I just found him on here.. so not all BP people are honest. 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Patrick Meade:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Shawn Ackerman:

    @Patrick Meade This is not so uncommon.  This cloud achieved exactly what it is intended to do.  He knew that you could not sell the property without his knowledge considering you had a binding contract that was not fulfilled.  You may just want to pay what he is requesting or contact an attorney to review your contract and potentially go through litigation.  In his mind, when you were ready to sell, you would contact him and he'd buy the property.  So instead of asking you to contact him when you are ready to sell he clouded the title.  If you need to sell quickly, make an agreement with him, if not seek an attorney's assistance with the matter.  Not sure about the laws in Texas but you could very well end up paying for the attorney and having to pay him all or a portion of what he is requesting to have the cloud lifted.  All the best.  Persist and you will WIN!!!

    this is just sick..  contract says is void if he does not get the job.  this a great case study of what not to do with unlicensed wholesalers that claim they solve problems..  this guy has major liability in my mind.. not only Notary fraud.. but clouding title and causing harm to the seller.  but like you said he knows he can try to extort 3500 out of this seller.. this is why Sellers should NEVER sign contracts with wholesalers or allow them to be notarized  you have to notarize to record them..  thats why these slim balls do this.. just for this exact reason. 

    So anyone reading this and of course there wont be many since its innocent people that get taken and they are not on BP .  DO NOT notarize any sale contract with anyone.. its not necessary to be enforceable.. but its necessary to record.  Also clearly denote in your contact that this contract is null and void if it is recorded.  Lastly if you dont have an agent then this is when you need to go to an attorney before you sign anything..  this is just so wrong on so many levels... what a scumbag and people wonder why wholesalers have such a bad wrap..  they come on with the HEY we solve problems  its just BS  total BS

     Actually, I just found him on here.. so not all BP people are honest. 

    Unfortunately that’s very true bp member is not a pass  

  • Investor · Houston, TX · Member since 2010 · 234 posts · 145 votes
    7y

    @Patrick Meade .. First off sorry to hear your situation .. Below are my 2 cents being on both side

    Situation: Both Buyer and Seller agreed with Terms during the point of signing the contract . Buyer was incentivized by a cost (less than market minus transaction cost)  and Seller was incentivized by a cash sale thus both party  signed the contract . 

    What happens what one party falls behind:  If buyer cant come through the agreement then they will loose Earnest Money and if seller cant come through then there is a fee/cost of marketing . Most of the large ones do not charge and some may (beyond any special provision in place)

    In your case: My understanding is that , you have a provision in place which gave you an exit and/or you didnt intend to bypass the original buyer due to a high price so you signed a new agreement after initial contract ended.

    Next step: You can go after is couple of ways in parallel and/or in series 1) RE Attorney  2) Social media 3) Civil lawsuit and/or a mix of all 3 

    1) RE Attorney ...happy to share local folks that i work with . You send certified demand letter with some time to response and then civil lawsuit to both husband and wife (less then a month and may cost around 300-500). You should be our of within 60 days ish 

    2) Social Media - Post the contract (only date) and call them out here along with everyone in their company food chain. Use both BP and Facebooks. Probably they are part of large facebook groups as well (e.g. 713Real Group On Facebook) 

    3) Civil Lawsuit - See #1 above 

    Reputation matters and so does a clean business practice on both side. Keep us posted. 

  • Member since 2019 · 34 posts · 20 votes
    7y
    Originally posted by @Shahriar Khan:

    @Patrick Meade .. First off sorry to hear your situation .. Below are my 2 cents being on both side

    Situation: Both Buyer and Seller agreed with Terms during the point of signing the contract . Buyer was incentivized by a cost (less than market minus transaction cost)  and Seller was incentivized by a cash sale thus both party  signed the contract . 

    What happens what one party falls behind:  If buyer cant come through the agreement then they will loose Earnest Money and if seller cant come through then there is a fee/cost of marketing . Most of the large ones do not charge and some may (beyond any special provision in place)

    In your case: My understanding is that , you have a provision in place which gave you an exit and/or you didnt intend to bypass the original buyer due to a high price so you signed a new agreement after initial contract ended.

    Next step: You can go after is couple of ways in parallel and/or in series 1) RE Attorney  2) Social media 3) Civil lawsuit and/or a mix of all 3 

    1) RE Attorney ...happy to share local folks that i work with . You send certified demand letter with some time to response and then civil lawsuit to both husband and wife (less then a month and may cost around 300-500). You should be our of within 60 days ish 

    2) Social Media - Post the contract (only date) and call them out here along with everyone in their company food chain. Use both BP and Facebooks. Probably they are part of large facebook groups as well (e.g. 713Real Group On Facebook) 

    3) Civil Lawsuit - See #1 above 

    Reputation matters and so does a clean business practice on both side. Keep us posted. 

     Yes, I didn’t intentionally bypass the first buyer, things didn’t work out for me on the new job in Colorado so I called and canceled the contract over a year ago. I didn’t even know he was still on my title until I decided to upgrade my life in Texas. My career keeps me in Texas there really is no better place for me in this industry. That contract with the investor was out of desperation to return home on a once in a lifetime opportunity that did not work out. 

  • Contractor · Oxford, MA · Member since 2018 · 807 posts · 745 votes
    7y

    I would love to know where he can't up with the number $3460. It is oddly specific. Personally I would file every complaint I could with everyone I could just to teach them a lesson. Maybe you get money out of it, maybe you don't but I tend to care more about principle than money when possible.

  • Member since 2019 · 34 posts · 20 votes
    7y
    Originally posted by @Bryan Devitt:

    I would love to know where he can't up with the number $3460. It is oddly specific. Personally I would file every complaint I could with everyone I could just to teach them a lesson. Maybe you get money out of it, maybe you don't but I tend to care more about principle than money when possible.

     Don’t forget the .40 cent.. I can’t figure it out either. He put zero in earnest money, had no money wired to title, wasn’t advertising it anywhere, didn’t put it on a mls, told me he was buying it as a rental property. He did spend 10 dollars in gas to come look at it and 16 to file the memorandum. So the way I see it he has 26 bucks and an hour of his time in this deal. After I hit him with all the facts in this with the notary fraud the contingency that was clearly met why he would still risk a lawsuit over 26 bucks.. makes no sense. I spoke with an attorney and a demand letter is going out today I will post what the attorney is saying. It’s basically what all of you have said.

  • Member since 2019 · 34 posts · 20 votes
    7y

    Names have been changed not sure if I can post it legally.. the guy is changed to slimmy Investor, the real estate agent is changed to real estate agent/wife and the llc was changed to Investment llc. I’m not going to post the entire thing but I just wanted to show y’all that everyone was right I have a super strong case! 

    Breach of Contract, Tortious Interference with a Contract, Fraud, and Suit to Quiet Title.

    In relevant part, that contingency states “This contract is contingent on confirmed or written notice of seller's job transfer and move from Houston to Denver, CO. If job transfer and move to Denver, CO is declined seller has option to terminate contract free of penalty.” On January 9, 2018, Slimmy investor (hereinafter “Investor”) filed a Memorandum of Contract in the property records of Harris County on behalf of Investment llc. This Memorandum was notarized by The real estate agent/wife, a party with in interest in Investment llc in direct contravention of the statutes governing notaries.

    1

    Unfortunately, my Client was not offered the job in Denver and remained in Houston. This Investment llc was informed of at least as early as February 2018. My Client, therefore, informed Investment llc that the contingency had occurred. In 2019, my Client attempted to sell the property only to discover that Investment llc Memorandum still clouded his title, preventing the sale. He contacted Investor and verbally asked him to remove the cloud. He declined. On March 6, 2019, my Client sent an email to Investor again asking that the cloud be removed. Again, Investor declined. At present, Investment llc continues to cloud title to my Clients Property. This violates the law. Additionally, by requiring money to do what the law demands, Investment lllc through its agent is committing extortion.

  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    7y

    We should start a general fund where people can donate/contribute to spending the time and money required to legally punish these people and clean up the real estate investor world. 

  • Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
    7y

    Which title company was used for this deal?  Where was closing supposed to have taken place?  Have you spoken to anybody over there?

    If this guy didn't put down EMD, didn't pay an option fee, then he didn't really have any consideration in the deal to begin with. Was he not required to do those things per terms of the contract?

  • Member since 2019 · 34 posts · 20 votes
    7y
    Originally posted by @Mark Sewell:

    Which title company was used for this deal?  Where was closing supposed to have taken place?  Have you spoken to anybody over there?

    If this guy didn't put down EMD, didn't pay an option fee, then he didn't really have any consideration in the deal to begin with. Was he not required to do those things per terms of the contract?

    The title company was capital title, the contract didn’t have an option or earnest. The buyer did not put one dollar towards the home.. only $16.00 to file the memo and cloud my title indefinitely. With the TBD close date it would have locked me in forever had my contingency not been in place. 

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y

    Name the buyer.

  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    7y

    @Patrick Meade

    I would first go the TREC route as this will get her Broker's attention. Send a letter tomorrow via certified and regular mail to all parties including the Broker demanding a FULL release be delivered to the Title company within 7 days or you will pursue legal action and file a complaint with TREC.  Filing a complaint costs you nothing and you will get results faster than the legal route

    I would included the unsigned memorandum and your original termination and point out who the notary is to the Broker.  My guess is they will want none of this and will give a release

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Bill B.:

    We should start a general fund where people can donate/contribute to spending the time and money required to legally punish these people and clean up the real estate investor world. 

    I am good for the first 100.00  these are first rate sleaz bags

  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    7y

    @Jay Hinrichs

    Put my $100 with yours if you or someone I trust can figure out how to spend it. 

    Need to find a BP lawyer willing to donate the time so we can just pay the expenses. 

  • Member since 2019 · 34 posts · 20 votes
    7y

    Thanks guys for your concern and I appreciate your offers but I went ahead and got a good real estate attorney and put together a demand letter it goes out to tomorrow I think these guys will definitely rethink the answer they gave me when I asked them to release that memo. I’ll keep y’all posted. 

  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    That sounds shady and members gave great suggestions on what to do.  They do this for a living and reputation is everything.  I had an incident where Buyer tried to do something similar.  We were in the middle of closing and two days before closing, they wanted a price reduction which we refused and had the right to do per our contract. We sent buyer mutual release agreement and they replied that they would sign it only if we paid them $1500.  Luckily, we got it resolved through correspondence and they signed the mutual release. I was ticked because they hadn't even put the EM down per the offer but yet they still had to sign off on the mutual release.  I know how you feel though because for me, it wasn't about the $1500, it was about giving it ever having to give it to someone who was a weasel throughout the transaction. 

    Captain Save-A-Home LLC
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    7y
    Originally posted by @Patrick Meade:

    Thanks guys for your concern and I appreciate your offers but I went ahead and got a good real estate attorney and put together a demand letter it goes out to tomorrow I think these guys will definitely rethink the answer they gave me when I asked them to release that memo. I’ll keep y’all posted. 

     Did you file a TREC complaint?

    I can put something together that would advise BP how to pursue defending these claims, costs, timing, etc. The problem is that most claims won't be worth litigating, even pro bono.

  • Member since 2019 · 34 posts · 20 votes
    7y
    Originally posted by @Ronald Rohde:
    Originally posted by @Patrick Meade:

    Thanks guys for your concern and I appreciate your offers but I went ahead and got a good real estate attorney and put together a demand letter it goes out to tomorrow I think these guys will definitely rethink the answer they gave me when I asked them to release that memo. I’ll keep y’all posted. 

     Did you file a TREC complaint?

    I can put something together that would advise BP how to pursue defending these claims, costs, timing, etc. The problem is that most claims won't be worth litigating, even pro bono.

     I haven’t filed anything yet, waiting on the demand letter to go out today  to see if we can get a response if we do and they lift it I will continue to close on my house only slightly delayed. If they don’t respond I will file the complaint to TREC. 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Patrick Meade:
    Originally posted by @Ronald Rohde:
    Originally posted by @Patrick Meade:

    Thanks guys for your concern and I appreciate your offers but I went ahead and got a good real estate attorney and put together a demand letter it goes out to tomorrow I think these guys will definitely rethink the answer they gave me when I asked them to release that memo. I’ll keep y’all posted. 

     Did you file a TREC complaint?

    I can put something together that would advise BP how to pursue defending these claims, costs, timing, etc. The problem is that most claims won't be worth litigating, even pro bono.

     I haven’t filed anything yet, waiting on the demand letter to go out today  to see if we can get a response if we do and they lift it I will continue to close on my house only slightly delayed. If they don’t respond I will file the complaint to TREC. 

    regardless file the complaint  its the only way these people will be put on notice and probably doing this to others.. its not going to hurt your position 

  • Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
    7y

     x2 File the complaint. Make sure to note that you contacted her managing broker, and it still wasn't resolved. File the complaint on the notary too. 

  • Member since 2019 · 34 posts · 20 votes
    7y

    Just launched the TREC complaint! We will see what happens. 

  • Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    7y
    Originally posted by @Patrick Meade:
    Originally posted by @Mark Sewell:

    Which title company was used for this deal?  Where was closing supposed to have taken place?  Have you spoken to anybody over there?

    If this guy didn't put down EMD, didn't pay an option fee, then he didn't really have any consideration in the deal to begin with. Was he not required to do those things per terms of the contract?

    The title company was capital title, the contract didn’t have an option or earnest. The buyer did not put one dollar towards the home.. only $16.00 to file the memo and cloud my title indefinitely. With the TBD close date it would have locked me in forever had my contingency not been in place. 

     I doubt a TBD close date would hold any water anyway, even if you didn't already have an out with your contingency plus the fact there was no consideration. The contract is supposed to have a reasonable timeframe. The close date needs to be agreed upon by both parties, so one party writing "TBD" in and expecting that to make the contract good indefinitely is completely unreasonable and demonstrates a clear lack of good faith, especially with them now clouding your title. Contracts aren't just open-ended like that.

    It doesn't really matter considering you had a clean exit with your contingency, plus there was a lack of consideration to make the contract binding to begin with but I think the TBD part is totally bogus too and you've got absolutely nothing to worry about. 

    They were probably just hoping you would not be sophisticated enough to call their bluff and are trying to scare/blackmail/extort you into paying their ransom fee (and randomized the number to make it sound more official). I've actually seen wholesalers recommend doing this type of thing to other wholesalers on this forum. They think they're being slick pulling this crap. 

     Good job not falling for it! 

  • Member since 2019 · 34 posts · 20 votes
    7y
    Originally posted by @John Thedford:

    Name the buyer.

     Christina Ilonzeh agent

    Yanyee Polydore Investor 

    SSREF LLC their llc

    NB elite realty 

    Susan Yates broker

  • Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    It's great that you named them.  Maybe that will keep someone from making the same mistake you made.

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