Two contracts, other buyer with contract clouded title

[Daren H.]

Looking to see how the experts handle this situation. I signed a contract with an heir to purchase a property passed along by her deceased mom. The contract was only signed with the daughter of the deceased who was occupying the property (wasn’t aware of the brother). Nevertheless, both are wanting to sell and cooperated on all of the heirship documentation. Home is going to get foreclosed on if not sold. Come to find out, seller signed a contract with another buyer before my signed contract (seller contacted me saying a guy showed up saying he had a contract to buy the property). Seller claims she wasn’t aware she had signed something to sell the house (thought it was some type of estimate). I don’t buy it but remote possibility because seller is older and not very “sophisticated” at all about this stuff based on our personal experience. Anyway, nothing was recorded at the time during my title company’s search. A couple of months go by with seller clearing lien and judgement issues. Closing date is set and my title company calls me to say a memorandum of contract was recorded by the other buyer. Seller does not want to sell to the other buyer (obviously a better deal from me), and they are ticked at the other buyer. 

The deal is okay. 1980s build, 3/2/2 in my neck of the woods. $120K purchase price, $30K rehab, $215K ARV. Would sell like hotcakes. I was planning to fix and flip. I told the family that if they wanted to sell to the other buyer I would not stand in their way or cloud title. They insist they will not sell to the other buyer and want to sell to me. I get a text message today from the sellers that the other buyer wants me to contact them and try to work something out. I plan to call and listen to see what they have to say.

Who else has dealt with this type of issue? What was the final outcome?

Just curious, could the contracts be voided if the heir who signed relinquished their interest to the other heir who didnt sign either contract, then that heir signs a new contract to sell?

Plan to talk to my RE attorney on Monday after I hear what the other buyer is talking about. First time I have had to deal with this matter.