I have a house under contract (about 3 weeks now), I have an investor that wants to see it so we called to set up an appt and the owner told us he sold the house to his neighbor just this week !!
This is BS ! Does this happen alot?
Now the house was a rat trap and the contract was for 8500 and we were going to sell it for 9500 - 10000, it was going to be a hard sell, but still, I am mad !!
Moving on to the next one !
This is probably over-complicating things at the price point you’re operating in, but…
You can lien the property by recording a “memorandum of agreement” or “notice of agreement” or whatever they’re called in your state, which will make it impossible for the seller, or another buyer to close with anyone but you. This lien clouds the title, and makes it uninsurable and unmarketable. That is, until you either release the lien, or close on the deal yourself.
It’s just a matter of notarizing the document with your signature and recording it against the property. It’s sort of time-consuming, depending on how far away the county recorders office is from you, and it will cost roughly twenty bucks, but it does put you in control total of the property, until you release the lien.
Of course, your lien only legally lasts until your contract expires. Except that, if the seller has a melt-down, and won’t let you close for any reason, he violates the agreement, and the memorandum pretty much morphs into a permanent lien. The memorandum keeps everyone honest, including you.
in the event that the seller experiences a hysterectomy because you kept him from shopping and closing on your purchase agreement with another buyer, you could say something like, “Mr. Seller I will be happy to let you sell to a different buyer for more money, and walk from our agreement. All I need is twenty thousand dollars to walk away, and you can do whatever you want. Deal?”
This is not some far fetched situation. I liened a property exactly the same way I described above. I knew the seller would shop my signed purchase agreement, because the price he agreed to was so far under market value. I didn’t just fall off the turnip truck. Well, the seller called me to back out the deal. I said, “Nope. I filed a memorandum of agreement against the property and I’m ready, willing, and able to close as agreed.”
The seller was so exasperated that I screwed up his plan to create a bidding war, that he offered me ten thousand dollars to walk. I turned him down, because the upside was more than a quarter million. In hindsight I should have asked for twenty-five thousand. He would have given it to me. That would have been a situation where I got paid ‘not’ to close.
Recording a memorandum is routine on high-dollar transactions. However, FIRST you’ve got to have a signed purchase agreement. No hand shakes, or promises sell, over the phone are valid.
FWIW
Welcome to real estate, where honesty and integrity are just words in the dictionary.
If you had the house under contract for 3 weeks and it hadn’t sold yet, it wasn’t a good deal.
Its happened to me a few times but that was when I was a newbie & didn’t have my cash buyers in place and had to advertise my deals on Craig’s list.
Now my deals are gone in 2 hours or less, the mediocre deals might take a week to find a newbie investor that is willing to pay more than my regular experienced investors.
I also added some additional wordage in my contract that seller acknowledges I have exclusive rights to this property and they cannot market or sell to anyone else until contract has expired or I have cancelled contract.
Channel that anger and frustration into finding better deals, that works for me.