Any creative solutions to this issue?

Question

So here's the situation:

A wholesaler recently came to me with a property he is trying to unload. I was able to find an end buyer who loves the property based on the numbers. Unfortunately the current home owner isn't willing to allow the property to be shown. Obviously she's going through a rough time right now. The wholesaler has offered her money and she still has said no. The end buyer has made it clear that if he can't get inside to estimate repairs he's not going to close on this property.

Beyond offering the homeowner money, does anyone have a creative solution to this problem?

Sage Jankowitz · Answer

No assignment. Wholesaler #1 was planning on assigning to an end buyer which I brought to the table and we were going to split the fee. Can't really do much here and if and when he assigns months down the line there's a good chance it will be with another investor. Win some lose some =)

Jaremy Moritz · Answer

I've had this happen several times over the years... really sucks, especially when you have a buyer ready to close and you can practically smell your cash.

If you've gotten the contract assigned to you, file the contract and assignment in the Real Property Records department in your county.  This way you will "cloud" the title and when the seller finally decides to sell the house, you'll be notified that they are trying to sell.  The seller will have to deal with you in order to get the title issue resolved.

As I said, this has happed to me several times.  One of the times, my end buyer paid to have the pool drained, cleaned, and serviced prior to closing.  He didn't want to have the "unknown" cost of the pool (it was black and hadn't been cleaned in 4 years), so instead of paying me an option fee, I agreed to let him have the pool done.  My buyer got permission from the seller to do the pool, but when the seller saw how nice the pool looked after it was cleaned, he decided not to sell.  I was furious.  I had it assigned for $11K.  The seller reimbursed the buyer for the cost of the pool cleaning and he thought that was that.  Three years later, I got a call from the title company informing me that he was selling the house and they found my contract had been filed.  Long story short, I settled for $5K, signed a release, and got my money.

Moral of the story:  $#it happens, file your contract and move on.  If she won't cooperate now, maybe she will down the road.

Sage Jankowitz · Answer

Unfortunately for me I'm wholesaling the wholesalers deal so there's little I can do. Oh well, lesson learned and a little bit wiser....

Jaremy Moritz · Answer

Do you have an assignment on it?  Doesn't matter if it's an assignment of an assignment of contract.  File it and secure your interest.

Danielle C. · Answer

Hi Sage,

If the homeowner is going to lose this property one way or the other, I read that as being sell at a discount or lose to foreclosure.

Understandably she's bitter, however not being realistic. If she sells, she won't have the foreclosure on her credit and will be able to rebound much faster.

What about offering moving assistance in the way of some money and actually helping move items?  Or perhaps offer to rent the truck?

Also, if the original wholesaler won't address the possible breach of contract, will he assign the contract to you, allowing you to discuss this with the owner?  Since this is your buyer, it would be better for you to be the primary on this deal.

Honestly, it sounds like selling is best for her, whether she realizes it or not.  I absolutely sympathize with her and hope that she comes around.  If you could somehow get access to her, perhaps you could reason with her better than the original wholesaler?

Either way, good luck to all of you!

Danielle

Justin S. · Answer

I agree with DemoL, they do not appear to be motivated if they are uncooperative.

Sage Jankowitz · Answer

Typically when I think wholesale deals, I think about a seller who is motivated and has plenty of equity. The wholesaler puts the property under contract and that's the end of it. I never considered a seller LOSING motivation after the property is under contract or perhaps they never had the motivation, but instead were convinced to sign under emotional duress....

Sage Jankowitz · Answer

Appreciate your thoughts guys, but man is it tough to let this one go! The wholesaler has it under contract, and a ready, willing, and able investor is all lined up. It's just a shame that there's no way to make this work!!

Demos Loizides · Answer

Maybe the homeowner isn't as motivated as the wholesaler thought she was. If that's the case, look for another deal.

Sage Jankowitz · Answer

Well the property is already under contract. The issue is simply a matter of getting inside. That's where her lack of motivate lies.

It just seems a little premature to totally abandoned this deal, no?