Deal almost fall apart due to seller being separated

[Sam Leon]

Just wanted to share a recent sale where the deal almost fall apart.

This is a private sale, I found the seller via Zillow's "MAKE ME MOVE" advertising, which is in itself unusual because I have always assumed these MMM sellers are just ways to gauge the market and not serious and eventually they will list it formally.  But I found a property that is very interesting so I sent in an inquiry, arranged a viewing, and yes, the seller said he is "not sure if he really want to sell".

I sent in a formal offer the evening same day I viewed the property.  AS IS with rights to inspect, 72 hours to accetpt, counter or decline.  He sat on it for 4 days then came back with a counter offer.  After some further text message negotiation we had a signed contract.  No agent, just him and I and we both have an attorney.

Everything was smooth sailing and the day before closing, my attorney got a call from the seller's attorney saying they need an extension for a week.  The reason given is they need to get the seller's wife to sign off, WHAT?  I looked up the title, and it's not husband and wife, only the seller's name (say John Doe) is on the title, I toured the house, inspection, had an appraisal, etc etc etc...and never saw a woman in the picture.

Turned out he is married and never add wife's name on the title, but now they are separated and heading to a divorce.  My lawyer thinks he was trying to sell the property and pocket the money since it was under his name only, but technically he can't sell it until things are settled.

So at that point I have already spent money on loan application, appraisal, inspection, survey, even home owner insurance, windstorm insurance, flood insurance are all binded and his wife whose name is not on the title can veto the sale and there is nothing I can do about it.  Ouch.

At the end though the wife signed the contract and the sale was finalized, the money after paying off their lender went into an escrow.

I wonder what happened if the sale went through before the wife finds out about the sale, can the wife reverse the sale?  Will it be a title defect?