Can A Wholesaler Put A House Under Contract For A Year?

7 Replies

I have a situation where a owner called me about a house he wants to sale. After arriving at the owners house, the owner tells me that he has the house under contract with a broker.The contract is for a year and is up in Feb of next year. This broker has had it under contract since Feb, this year. The broker made the owner sign an agreement not to talk about or disclose anything about the price of the house. The owner was ask to point all interested potential buyers to this broker. After talking to the owner for a while a lot of things didn't add up to me. So, i looked for the the listing on the MLS, it doesn't exist and was never listed by the broker...So i got the broker name and number as if i was interested in buying . I called him not letting him know that was inquiring about the house in question but that i was looking to buy in a whole other area just for conversation to ask questions. So i asked him if he was a realtor or broker, he says no he's an investor, which basically means wholesaler talk. So turns out, the owner actually thinks he dealing with a broker because that's what he identified his self as.

So my question is , can this guy legally put this house under contract for a whole year, and post the property on zilliow as if hes the owner? The owner wants to sell but thinks he cant budge because of this contract with this so called broker who hasn't done anything with the property/contract and has tied the owners house up for a year. Also am i in the wrong if i was to purchase this house from underneath the wholesaler who's clearly taken advantage of an elderly  person.

There are two things in play here. First is the contract itself. As long as the seller is mentally competent, he can sign a contract for any length of time he wishes. Some states do have laws to limit this length, but in general, a legal contract is whatever two adults agree to. Now it sounds like the wholesaler lied about who he was, that is sleazy 

The second problem is that you cant circumvent his contract without getting sued for tortious interference of a contract (what it is called in most states)  

The good news, is that it doesnt sound like this loser is doing anything to sell this poor sellers house.  That should make it easy to buy in Feb when the first contract expires. 

Potentially there might be an out clause somewhere in that contract.  I would want to see it and give it a thorough reading to see EXACTLY what the contract says, and IF the wholesaler fraudulently represented himself as a broker.  

It’s pretty standard for realtors to contract a house for a year. I have had more than one seller contact me and I wasn’t able to buy a property , because a realtor had it under a listing agreement and the seller’s house ended up being foreclosed, because the realtor would not take stage left. It’s disheartening that a Whole Seller would tie up a property for a whole year. If we’re going to beat up on Whole Seller’s it’s disheartening that a realtor would tie up a property for a whole year. 

@Lee Bailey ,

If this guy is representing himself as an agent, and he's not an agent, he can face a lot of trouble over that. Depending on the contract, that alone could be a way out of it. If you want to see if the contract can be cancelled, gather all of the pertinent facts, a copy of the contract, and talk to a lawyer.

Otherwise, update us in February.

Again, get a copy of the contract.

A seller can blow up any deal for one reason or the other, if only by not cooperating. Not very ethical, but then again, it's real estate sales.

I guess you could try specific performance, but that happens, if ever, like 1 out of 10,000 times.