I am not sure what to do over the EMD. Being new to wholesaling, I think I did it wrong. Just that the deal came to us and I wanted to try to follow everything through correctly, and quickly. So after the contract was signed by the seller and myself. I sent the contract along with a check to the title company. I think I am seeing now that I should have waited for a buyer.
In any case the seller gave me issues with two different buyers. The first thing was having someone look at the property. It took 4 days for her to get the tenants to let someone call and schedule a day to go view the property. The buyer loss interest, or said they did over the tenants not being co operative.
Another potential buyer was wanting to see the rental agreement she had with the tenants She would not let me have a copy to show the buyer that the figures she was giving us was indeed the amount she was getting for the property. She pushed that in the contract it states she did not have to turn that over until closing. When in fact that meant the rental contract would pass to the buyer. I did put a clause on the contract that states "sale is subject to inspection or partner approval".
Now I have to get a release signed by her to turn over to the title company to get the money back. When I tried to talk to her about it I was going to offer her half, just to get it wrapped up. I didn't even get to state that and she started getting really mad and is saying the money is hers. That she is going to sue me for it. At the end of the conversation I just said it could sit in escrow for all I care.
The only thing I can think of trying at this time is to send a copy of the contract with the two items highlighted and a copy of the release and a self addressed envelope for her to return.
Any other ideas?
You are learning the hard way. Typically you never put down an earnest money unless they ask. You should also try to put the EM with YOUR closing attorney. If your contract has a back out clause you should not need her to sign a release form as per the contract. If you were a Realtor this might be a different case. You might need to consult with your closing attorney to find out what you can/should do.
Most people who are selling a home are usually cooperative and can get you in fairly easily.
Yes thank You @Curt Davis. Sorry my mention doesn't seem to be working. I put it into a firm in Florida that many have mentioned to use. So I thought as long as the clauses were right I would be able to get it back if I wan't able to move it. That's why I was a little surprised when they sent a release form after I called and said I was not able to get anyone to re assign the contract to and that she was a bit difficult to work with.
I also wasn't sure if I should put the title companies name in the post.
@Terri Lewis this is usually the time of the deal when my attorney writes a nasty-gram along with a copy of the termination of contract and termination subject to disapproval per contract 1.b or whatever. I wouldn't let these things fester, I'd get out as fast as possible. I'd get out all together. Get your money and find a reasonable seller.
This can only end worse and worse. So long as your contract has that ... And your in the timeframe ... Run!
You are definitely in talk-to-your-attorney territory.
I don't know about Indiana, but in Utah, title companies need a release from both parties where RE brokerages can release EM to the buyer without seller consent if the dates and notices on the contract have been met.
Look at your contract. Our standard purchase contract includes release of leases as part of the seller's disclosures. If the seller refused to give you the lease, they are in default.
If the seller is in default and you have to hire an attorney to get your EM back, you have damages. The EM may entitle you to claim up to EM amount as liquidated damages against the seller.
Makes me a bit nervous that you say "I put a clause in the contract that says..." so you may chalk this one up as education, but talk to an attorney.
I did go 3 days past the end date of the contract before I told her I didn't have anyone. That I regret. I told the person I work with and the closer that I didn't find anyone to buy or assume the contract. Also stated she wouldn't allow a timely viewing for one and the lack of wanting to let us see the rental agreement.
So am I understanding this right. I could wait until I have a buyer to submit the EMD and that can be from the end buyer?
I assume this is a Florida property, with the EM at a Florida title co. (Independent Title?). The title co. does Not have the unilateral right to decide who gets the EM, and a release from both parties is required....otherwise, off to court you go. It is the same here, as William said, in that if the EM is with the broker, they can get an Escrow Deposit Dispute order from FREC, after both parties submit a written statement, and distribute the EM accordingly. I always have the EM placed with a broker, if they are involved.
@Wayne Brooks It is a property in Indiana and we have been using a national title company in case we get a buyer from somewhere else. This property was a good investment property. The title company is in Florida, but have had different investors, wholesalers state that they are a really great company. I just jumped the gun sorta speak with sending the contract and EM.
We have another one with them and just waiting on the code violation to be remedied per agreement with the seller. We are hoping to fix and flip that one. Or at least re assign the contract on it.
You went three days past the close date in the contract? She's getting that EM, sooner or later.
You are actually quite right @Richard C. I should have just canceled a few days before with the way the situations had previously occurred. Kept better track of my scheduled duties, and acted in a professional manner.
I also think I need to start considering a VA or some sort of office assistance, to lighten my load.
I also feel as @Curt Davis that she, plain made it difficult to get C buyer. She was not able to produce simple requests to secure C. I did have another in the works 2 days prior to end of contract. Should I have put a rider on the contract for just that potential buyer?
1. Not allowing an visual inspection prior to offer.
2. Not producing rental agreement at $185.00 per week for confirmation of said agreement.
So @Richard C. I am still confused, as I felt a split was a pretty decent offer. She just wouldn't let me even get that in before she started verbally bashing me.
Well, a 50/50 split when she is entitled to 100% isn't a great offer from her perspective.
How aware of what you were doing was she? I'm talking about the making it difficult to get a C buyer thing. Were you presenting your potential C buyers as "partners" or something? Or was she fully aware that you were seeking end buyers?
I may be missing something but it sounds like you didn't terminate the agreement until three days after time expired? If so, and if you didn't get an amendment extending or modifying the original terms, then I agree with @Richard C. that your EM is very likely gone (all of it).
We felt the property as a rental was a good deal. If we had the funds we would have bought and held. with out funds was mostly trying to assign contract. I was also not trying to present directly anything concrete to her as to direction we were trying to move the property. She also knew we lost one by not supplying proof of rental amount, for I believe a local investor. She pushed that she didn't have to until closing so she was just not going to supply it. We also had someone with a large down payment and was seeking funding for them. This might have been the couple that she delayed allowing to see the inside but I am thinking there were 3 potential buyers. ( little groggy from pain meds due to accident last night and having to type with one hand) We also found funding for them here on BP, which she was aware of. I had kept in constant communication with her during the contract. She also knew we were near the end of the contract period, when I talked about another buyer. She stated she had a potential buyer, however I did not try to stop that. I felt she was sabotaging to be able to sell to her person. I have had buyers go around me in the past so I wasn't sure if this was going on either. I see that she still holds the title for it though.
Today I just feel like giving in, kind of how @Wayne Brooks said move on to a more reasonable seller. Just wash my hands and learn from all of you and BP as to how to do it right the next time.
I really do appreciate your assistance and in put.
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