Getting Hosed by 3rd Party Auction House on REO Buy

[Jill Patton]

Hi, 

About three weeks ago, I won a bid to buy a REO from the online bidding site - Hudson and Marshall (H & M). I signed the contract and made the EMD. H & M said the bank verbally agreed to accept my bid and sell the house to me. I was waiting to get the executed contract back but instead I got an email today saying the bank had decided to re-sell the house on another 3rd party site.

I put a lot of work into this house (i.e., getting the city liens cleared, etc.) based on H & M's promise to sell.  And, the bank just decides to walk?  Ugh!  Also, I've had $12,000+ tied up and I passed on other deals waiting to close on this property. 

Seems like "false advertising" to me.

And, I've bought a ton of properties at foreclosure auctions but this was my first time trying  H & M and its been a horrible experience.

Has anyone had a similar issue with this auction house, or another one? 

If you were the investor on this deal, what would you do?

Thanks, 

J