We apologize, but the forums are closed for new posts. Click Here To Join The Unemployables Facebook Group

Welcome, Guest. Please login or register.
August 18, 2022, 06:40:08 pm
Home Help Search Calendar Login Register

Welcome, Guest. Please login or register.
August 18, 2022, 06:40:08 pm
Home Help Search Calendar Login Register

Author Topic: 1 Property. 2 Buyers. Need advice  (Read 4905 times)

Offline champstar2727

  • Member
  • *
  • Posts: 17
1 Property. 2 Buyers. Need advice
« on: July 13, 2011, 01:16:11 am »
Here is the situation
Got a call from bandit signs ("We Buy Problem Houses Cash")
Put property under contract for 15k from seller
After tons of calls from potential buyers one agreed to by the property all cash for 23k with $1,000 deposit, but the contract was mailed so it took about a week to get everything back (i.e signed contract and 1k money order).
Within that week while waiting, I got another buyer who agreed to pay 25k, email contract, and western union the 1k deposit. So I had everything from the 2nd buyer the next day, and now we are set to close next week. Now I just received the first contract + deposit by mail from the first buyer. My issue how can I break it down to the first buyer that they did not get the property? Even though they were first, they were not first to get back a signed contract and deposit in my hand. Is there any particular way you would let them know the situation?

Thanks in advance.
p.s the property is in Eagle Lake, Tx.

Offline kdhastedt

  • Member
  • *****
  • Posts: 5807
Re: 1 Property. 2 Buyers. Need advice
« Reply #1 on: July 13, 2011, 09:10:03 am »

...and still maintain your integrity?

Not a trick question....

Keith
I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline moziah1

  • Member
  • **
  • Posts: 52
Re: 1 Property. 2 Buyers. Need advice
« Reply #2 on: July 13, 2011, 10:03:40 pm »
Are you serious?  lol.  Find out what the 2nd investors criteria’s are and find him another deal ASAP.  Do the right thing!

Offline champstar2727

  • Member
  • *
  • Posts: 17
Re: 1 Property. 2 Buyers. Need advice
« Reply #3 on: July 14, 2011, 01:03:05 am »
Are you serious?  lol.  Find out what the 2nd investors criteria’s are and find him another deal ASAP.  Do the right thing!

Should have said this at first, but they are not investor buyers. The property is in a small town, and both buyers plan to fix up the property themselves.

Offline jmd_forest

  • Member
  • ****
  • Posts: 617
Re: 1 Property. 2 Buyers. Need advice
« Reply #4 on: July 14, 2011, 06:46:18 am »
Do you have 2 FULLY EXECUTED (signed and dated by both buyer and seller - I never sign the contract until AFTER the other party signs since it is not unusual for buyes/sellers to get cold feet) sales contracts with 2 buyers? If so, you have some legal problems. If only 1 (or 0) of the contracts is fully executed you merely have an ethical problem.

Assuming there are 2 fully executed contracts, I'd talk honestly with the second buyer and try to get him to cancel the contract. If that doesn't work, talk to the 1st.

Offline champstar2727

  • Member
  • *
  • Posts: 17
Re: 1 Property. 2 Buyers. Need advice
« Reply #5 on: July 14, 2011, 11:26:20 am »
Do you have 2 FULLY EXECUTED (signed and dated by both buyer and seller - I never sign the contract until AFTER the other party signs since it is not unusual for buyes/sellers to get cold feet) sales contracts with 2 buyers? If so, you have some legal problems. If only 1 (or 0) of the contracts is fully executed you merely have an ethical problem.

Assuming there are 2 fully executed contracts, I'd talk honestly with the second buyer and try to get him to cancel the contract. If that doesn't work, talk to the 1st.
Both contracts are fully executed. I was told keep marketing until I have a signed contract in my hand even though one was out in the mail.

Offline Gold River

  • Member
  • *****
  • Posts: 2329
Re: 1 Property. 2 Buyers. Need advice
« Reply #6 on: July 14, 2011, 06:53:16 pm »
Hi,

    You have a huge problem on your hands. Like JMD_Forest said your only chance is to try to convince your second buyer to void his contract first, then depending on that outcome try to convince the first buyer to void his contract.

Because it will become a court matter if can't solve this and ending up with a net loss is a hard way to invest in real estate!

Don't sign the contract first, always send it and get buyer to execute and send back, and next time try to fax or email the contract and ask for a fax back with buyers signatures, then overnight the original signature copy back to you!

A week is a lifetime in a real estate deal!

You sold it for $23k total, in this situation your punitive damages in a contract lawsuit could be upwards of your sales price and that does not include paying your plaintiff's legal fee's and cost's, let alone your legal fee's!

This could be a very costly learning experience!


                 GR 

Offline champstar2727

  • Member
  • *
  • Posts: 17
Re: 1 Property. 2 Buyers. Need advice
« Reply #7 on: July 14, 2011, 07:35:02 pm »
Hi,

    You have a huge problem on your hands. Like JMD_Forest said your only chance is to try to convince your second buyer to void his contract first, then depending on that outcome try to convince the first buyer to void his contract.

Because it will become a court matter if can't solve this and ending up with a net loss is a hard way to invest in real estate!

Don't sign the contract first, always send it and get buyer to execute and send back, and next time try to fax or email the contract and ask for a fax back with buyers signatures, then overnight the original signature copy back to you!

A week is a lifetime in a real estate deal!

You sold it for $23k total, in this situation your punitive damages in a contract lawsuit could be upwards of your sales price and that does not include paying your plaintiff's legal fee's and cost's, let alone your legal fee's!

This could be a very costly learning experience!


                 GR 

Lets say the first buyer agrees to cancel the contract...Is there any documentation needed on my end ?

Offline nsu1997

  • Member
  • ****
  • Posts: 739
    • I buy houses in the DC metro area!
Re: 1 Property. 2 Buyers. Need advice
« Reply #8 on: July 15, 2011, 12:19:40 am »

Both contracts are fully executed. I was told keep marketing until I have a signed contract in my hand even though one was out in the mail.

Key word: MARKET. There's a HUGE difference between continuing to market the property and ratifying multiple contracts. As you've probably figured out by now, the right thing to do would have been to tell the 2nd buyer he's next in line if the 1st one doesn't come through. Or take a backup contract but don't sign it until the 1st buyer flakes out.

This has the potential to get ugly for you but it depends on how cutthroat the prospective buyers are. The fact that you're in a small town MAY help, as it's more likely they'll be willing to work out something without lawyering up as opposed to if you were in an urban area where people tend to be less friendly and more cutthroat.

As far as specific advice as to what you should do, I honestly don't know other than to just maybe arrange a conference call with both of them and just come clean. Tell them you're new to the biz and you misunderstood what it meant to continue to market the property. Just tell the truth and hope it doesn't get ugly.

Offline nsu1997

  • Member
  • ****
  • Posts: 739
    • I buy houses in the DC metro area!
Re: 1 Property. 2 Buyers. Need advice
« Reply #9 on: July 15, 2011, 12:25:29 am »

A week is a lifetime in a real estate deal!

Ain't that the truth. Before faxing became vogue, the typical advice for contracting wholesale deals was to OVERNIGHT the contract and include a SELF ADDRESSED, PREPAID, OVERNIGHT mailer for them to overnight it back to you. Snail mail was unacceptable back then, and in the 21st century forget about it.

Time is your enemy when closing deals.

Offline Gold River

  • Member
  • *****
  • Posts: 2329
Re: 1 Property. 2 Buyers. Need advice
« Reply #10 on: July 15, 2011, 01:15:37 am »
Hi,

    Everyone signs a cancellation notice! And you return the earnest money deposit!


                  GR

Offline champstar2727

  • Member
  • *
  • Posts: 17
Re: 1 Property. 2 Buyers. Need advice
« Reply #11 on: August 17, 2011, 04:07:54 pm »
UPDATE:

Since there were title issues we told the buyer about them and gave back the deposit check. Also let them know there was someone in front of them and when title issues are clear and the first buyer doesn't close we will call them. It worked out and we closed with the first buyer and netted 10k from the deal.

Thank God , and thanks to everyone for their insight.

Offline ClevelandSlim

  • Member
  • **
  • Posts: 51
    • The Ohio Home Connection
Re: 1 Property. 2 Buyers. Need advice
« Reply #12 on: August 17, 2011, 05:40:01 pm »
Glad that worked out for you. It could have gotten really messy!

All the best,
~Slim~
REALTOR, SFR, from Ohio. I just moved to North Hollywood, CA!   Waiting for my real estate license. I need to make some money!  If you need web site work, ads posted, etc please contact me.
I Gotta Pay My Rent!!

 




SMF 2.0.15 | SMF © 2017, Simple Machines