Dealing With a Nightmare Sellers Attorney On A Wholesale Deal
I have been wholesaling for awhile now and have yet to deal with a troublesome sellers attorney until one of my last deals last deal. I am a wholesaler out of Chicago and have met and dealt with lots of people, but non like this certain individual.
This deal was SFH I got under contract through my Probate Marketing. It was a cheap home on the south side and it was going smoothly at the beginning. I received the call from the executor who was extremely motivated and I offered my services. I met with him the next day at the property, made my assessments, and got a contract signed that same day. We had great report with one another and he was happy to be rid of the property. the number are as follows:
Contract price: $25,000
Repairs: $30,000
ARV: $115,000
I offered it at $35,000
This is 57% of ARV to an end buyer. I found a cash buyer who really wanted it 10 days later. He was going to Rehab it himself and move his family into it.
The seller gave the contract to his attorney and had no problem with it initially until we told him that we were going to assign the contract to another buyer.
This is where it turns ugly. He than proceeded to tell me that it was illegal and that I had no right to assign the contract. He claims he spoke to the attorneys at the Title Company we were closing at (ATG -Attorneys Title Guaranty Fund, Inc). I clearly told the seller we may buy it or pass it on to one of my investors. I also signed the contract Amin Ali and/or assigns. I did everything I was supposed to do but this guy was unbelievable.
Then I called my attorney to take over on my behalf. The sellers attorney still wouldn't budge on his stance . To make matters worse he told the Executor of the property we were scam artist and said we were trying to violate a list of HUD violations. The seller called me to see what was going on and I explained to him that his attorney was greener than a Jets fan and probably never completed this type of deal before. He said he has to do what his Attorney tells him and the only way we could close the deal was to work it out with him. The sellers attorney said the only way he could do the deal was to put me on title and have me issue a quick claim deal to the end buyer. There is no way the end buyer was going to allow this and I said no thanks to that Idea.
So after a few days of my attorney and the sellers attorney going back and forth we just decided to double close on it and take some losses.
This next part was shocking and it validates it always pays to have a good attorney on your side. My attorney called ATG's head office down in Champaign, IL and spoke with the lead underwriter.
This is the exact email I received from my attorney after speaking with the lead underwriter that he sent to the sellers attorney:
Counsel,
I spoke to the head of underwriting at ATG yesterday — Tanya Story. She indicated that ATG has no problem with assignments, flips, double closings or simultaneous closings. She seemed quite incredulous that you suggested otherwise as their office conducts these transactions daily. She seemed shocked that you were hesitant in moving forward with a simple assignment contract…I agreed.
She said she could walk you through how to handle an assignment if you felt nervous or uncomfortable. You can reach her at 217-xxx-xxxx
I will call you later today so we can revisit how to conduct this transaction. Or you can call me at 773-xxx-xxxx at your convenience.
After that I knew the sellers attorney was a liar after saying he spoke to the attorneys at ATG and said it was illegal.
The sellers attorney had to concede and move forward with the deal. The reason he gave in response left me flabbergasted. He told my attorney he didn't want to move forward with the deal because I said I didn't want the deal on the HUD. He lied again just to not make himself look like a fool. Shameful behavior in my opinion.
In conclusion we closed on the deal 2 weeks later after all documents were ready for closing and I was glad this ordeal was over.