I was working on the deal with a motivated seller…
Apprised Value $ 70,000
Market Value $54,000
Owner’s Mortgage $ 60,000
Current Payment $ 564 per month
Market Rent $ 600 per month
The seller and his wife was begging me to take over the property. They are 3 months behind the payment. They told me they called several other people from “we buy houses” but none were ready… as they owe more than market.
I signed a “Sale Purchase” contract contingent upon doing short sale.
I also made them sign “memorandum of option” which was recorded at county office as Exclusive option to Purchase.
I also have “Authourity to release information” signed.
I have been working with bank last few days to see what documents they want. Seller still needs to provide me all the documents to submit to bank.
Seller today talked to their uncle (who happens to be real estate attorney) and now wants to back out of the deal. The seller does not have copy of the contracts they signed with me. I bet the attorney uncle is also not aware that these contracts are in place. The seller now says the house was appraised at 70K so they want profit from it but market value is 54K. I have spent my time and energy to create this deal. I do not want to lose this deal or any profit.
What are my options ? They are already 3 months behind payments.
Do you have the original contract? It doesn’t matter if the homeowner has their copy, you have the actual contract signed.
One thing you have to remember though…don’t get emotional in these deals. I used to get involved emotionally with the home if the deal didn’t go through but it’s all a numbers game
Don’t get your emotions tied in this business. You have to leave your emotions out of it.
Speaking from experience, it’s so easy to get emotions tied up in a property. If the deal doesn’t work out, move onto the next one.
Yes I have all the original contracts. Seller does not even have copy of any contracts, I think thats why they are jumping. I tried calling them but they wont pick up.
Send them a certified/registered letter through the post office, fed ex, or UPS that requires a signature with the contracts and a letter informing them of the contract. That way you know they have them.
However, most contracts can be challenged in court and you never know what a judge or jury may decide. Again, read “challenged” I don’t mean to imply that the contract(s) in place are not valid. Just that anything and everything today can and has been litigated. If it goes that route you have to determine if there is enough profit to be made to shoulder that expense.
I don’t know how you can save this deal if they seller won’t even talk to you. I would try and contacting this “uncle” and inform him of the contracts and maybe even send him a copy.
Good luck. There is a very good post on another thread regarding a similar type situation that involved a foreclosure and litigation. I think it was Sybadon who started the thread.
If you got this property, what would you do with it?
It’s got negative equity. It will, in all probability have a negative cashflow.
Is it really worth the hassle? Personally, I would move to the next deal…
If you’re hell-bent on the deal and he’s hell-bent to back out, you’ll either have to invoke any “liquidated damages” clause in the contract or sue in court for specific performance…and, again, is it worth it for a $60K property?
