Seller Totally Cops Out of Agreement in a Slick Way!

he can't sell his house if you have signed paperwork with him already. thats why it is called a contract. no sir he is in breach of contract. time to talk to that lawyer about this as well as your deposit check you mentioned in another post on here.

nicole what kind of agreement did he sign ??? please tell us.
a purchase and sale agreement ??????????

Thanks for your response, Walt. He signed a valid Agreement of Sale form that I drafted. Since this was an off-market property, I pretty much controlled how the deposit would be handled, which would have been given to the title company. I'm in the clear in terms of my deposit money. He sure did breach our contract!!! I couldn't believe what I was reading when he sent the email to me. I'm thinking there's much more to the story, but I decided to not pursue this matter legally since no money was at risk on my part. I documented just what he told me in the form of an addendum to the contract and requested that he signs it. He hasn't signed it yet. He replied to my email that expressed my disappointment by saying that he didn't realize the contract was binding because he never received a deposit slip from me. I told him that deposit monies do not make a contract binding, but the signatures do. He had known from the start, which was this past Wednesday, that the deposit would be given to the title company, not him personally. The craziness, I tell ya, wow!

The seller cannot do that at all! If your contract, inspection period or any other clauses in your addendum haven't expired then the seller didn't give you a chance to buy the house. It would be one thing if he told you he didn't want to sell to you and backed out himself first.

Yes, I totally agree. I'm still in disbelief that he actually sold it to someone yesterday. Something still seems really odd. He hasn't responded to the rest of my emails yet.

I cannot believe he signed and then believed that you were not serious in buying his property. It does sound strange to me. Maybe you should contact a lawyer since he hasn't signed the addendum, but time is probably of the essence in this case.

As everyone mentioned something seems off run a check to see who bought the property because if you planned to wholesale one of your buyers could have gone around you and you might not want a buyer like that on your list, even if you didn't loose money you want to make sure you are dealing with people with honest business intentions

Hun business is just that business. The person that signed the contract owes you a fee that you were going to get from the deal. I would with out checking to see who the buyer was and I would send him a letter stating that he very well knew that he had signed a legal and binding contract and because he has broken that contract you are still owed the deal or a fee before other actions are taken (last part is up to how far you want to go, but a strong letter from you or a lawyer will most likely work). Good luck

Keith is right

Keith is right Nicole and that is a great way to go, if one of your buyers did pull that very stunt on you

Rich Dad Education has Purchase Agreement Contracts that include up to $5,000 in liquidated damages for breach of contract, which keeps sellers from screwing with you... they'd have an agreement to pay you $5,000 and they'd lose in court in a NY Minute... also, the $5k makes it WORTH suing them for.

Thanks, everyone. I really appreciate all of your feedback.

Femailceo, I just may contact my attorney tomorrow. I'll see how things pan out with the title company first.

Keb64 and Insidernotes, I am way past anxious to find out who this buyer is, lol! However, I had no buyers lined up for this. We just signed the contract on Tuesday, 6/17/14.

Markriese, thank you for mentioning this. I will add some similar language to my contract when dealing with private sellers. We buyers must be protected too.

Technically the seller was right, the contract is not binding in court without a deposit ... the legal term is consideration. That's why always give an EMD, even if it's only $10.

Hey Nicole,

my advice to you is, move on and forget about the case all together. People like that are punished by their own existence. I learned that term from Joe Polish and thought about it many times when somebody did me wrong.

Thomas

Hello, gceriani. The deposit was to be submitted to the title company, not the seller. The seller had known this and agreed upon signing the contract.

Hi there, Thomas. I agree wholeheartedly. I'm gonna move forward. The only disturbing aspect is that the seller refuses to answer my calls or return my calls, and he won't reply to any of my emails. He has not signed the addendum yet in regards to terminating our agreement. I talked with my title company and had title work stopped.

I'm confused. Did you ever give the title company the earnest money deposit?

Hello, TRSD. The check was going to be sent to the title company today.

If you guys had a signed contract and you were the end buyer I would have you attorney try to go after the money you spent on preparing the title since the seller backed out without letting you know and sold the house to another investor.

So you opened escrow and started the title work without providing the earnest money deposit? What did your offer state regarding the earnest money and when was the offer accepted?

Nicole,

Once you make an agreement to purchase a house and put down your good faith deposit, the contract is binding. That means that you and the seller are expected to follow the agreement that you both signed.

If there was no Earnest Money given to the seller, or Escrow was not opened, then your contract will not stand in court.
Escrow is usually opened the day after there is signed "acceptance" of an offer on a standard sale, and the deposit is made.
If the contract was signed on the 17th, and escrow hadn't been opened on the 20th, I can see why the seller assumed your lack of interest...

It's a lesson learned for all of us: if we don't have our buyers lined up, and we don't stay in constant communication with the seller during the transaction, we can lose the deal.

Move on... build your buyers list, and find another amazing deal!

Thanks for sharing.....

This is very eye opening

Hello @Ray26CT - I wasn't charged for starting the title work, so no out of pocket expenses on my part - thank goodness!

Hello @TRSD - Yes, what I normally do when submitting the contract to the title company is simply send the contract so that they can start running title. Actually, I usually don't put up deposit money, as the EMD does not make a contract binding if the language is not in the contract. With this particular case, since it's my "go-to" title company, I can simply mail a check out after having the agreement signed. There was no specified date to submit the EMD to the title company, so I hadn't violated anything. I didn't originally have the EMD "language" in my contract, and only agreed to put up a deposit after the seller asked. I told him that it would be sent to the title company.

Hello @Valuni - Thank you for your response. This is the first time that I dealt with a seller that asked me to put up a deposit. The only time that I put up EMD is when I'm dealing with MLS properties, upon the seller signing the contract via his/her/their listing agent. But, I never put up an EMD with private sellers (unless they ask), as it's not a requirement in order to make a contract valid. The only way that the contract could have been voided in terms of the EMD is if the language was in there and I never followed through with my promise. The reason that the deposit wasn't sent immediately is that a wholesaler sent me the seller's same property via email asking $30K. I called the seller and asked him what was going on and if he had a signed contract with another person. He told me he had no clue what was happening and that he only signed a contract with me. So, I forwarded the emails that the wholesaler sent me in regards to his property. I thought that I was being scammed somehow, as the wholesaler had detailed information about the gentleman's property. I found out that the seller's friend contacted a wholesaler to have him move the property for the seller. I expressed my concerns with the seller and was a bit reluctant to proceed. I called the wholesaler, who's California based, and had gotten clarity of the matter. I then told the seller that we can still proceed with closing on this. Then, boom, that's when it happened: I emailed the seller the following day to schedule a walk through for that coming Monday with one of my partners, and he responded the next day and told me it sold, as he thought that there had been a lack of interest.

@Valuni - I was actually buying this property outright.

Hello, DG family. I've had the hardest time getting a response from the seller. I checked public records, and it appears that he sold the home for $5,000 on 6/25/14 - $6K less than what I was buying it for. We were due to close on this on/before 6/30/14. So, the seller lied to me and did not have it sold when we last communicated. The seller's friend who first told me about the deal contacted me about another property and told me he felt bad for what happened, lol. This entire situation makes no sense to me, but I've since moved on.

Have a lovely weekend!