Rental Property Investor · Houston, TX · Member since 2019 · 2 posts · 0 votes
Got a property under contract at 6pm on the day before, posted it online and on Facebook groups and by 1:30pm the following day someone knocks on sellers door and she sells it off to the next person. I am not naïve to the risk of this, I would just like to know if people have clauses in their contract with the seller to stop them from selling it off within the 30 day period while you find a seller. Unfortunately I had already lined up a seller and would have been able to close today.
Also do you advice putting down earnest money?
Secondly, advertising works in two folds as it exposes you to someone else swooping in and stealing the deal but also increases your likelihood of closure, so I don't believe there is much in the way of what can be done to protect yourself, but would appreciate any advice if you have a way of managing this risk.
Ouch! Unfortunately that does happen. In most typical contracts, the seller may cancel and the buyer just gets their earnest money back. Your two remedies are to 1. sue the seller or 2. file the contract at county and cloud the title. In the 2nd scenario, you are filing your contract so that when any title company (or closing attorney) does a title search for closing with the new buyer's closing, they will see you had a claim to it as the buyer. Both scenarios can be messy, but it also has to do with rapport and clear expectations with the seller and you as an investor. The seller may not have felt comfortable with your ability to perform on the contract as written, otherwise why would she sign the next day with someone else?
Thanks Anson for the response, I had communicated that it might take anywhere from a few days to 30 days for us to find someone, and the person she signed with said she would get the money tomorrow guaranteed. I believe that’s how he was able to close it, she mentioned that’s why she went with him. I will follow up with her in the event this person was just trying to get a contract signed and has no buyer. My take away from this is, get more deals, tried to manage expectations also but don’t think that worked in my Favor. It’s a learning curve. Thanks again for the comment.