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Updated almost 5 years ago, 02/20/2020
Seller attempting to sue me for not buying property.
Hiya all. Well here's my situation.
I wanted to buy a second rental property after we moved to Hawaii for work and became bankable again. I was planning on using the HELOC money from our first rental as the downpayment. I found an agent here on BP from Wisconsin because I wouldn't buy in Hawaii and I wanted to get out of Illinois because the taxes were too high.
So I found a gut rehabbed 2 flat in Milwaukee Wisconsin. I put an offer and it was accepted. I sent the earnest money in time and scheduled the inspection. During the inspection, we found out much of the work was done poorly, including plumbing that didn't lead anywhere. We weren't able to inspect the electrical system because it was turned off from the main. There were other little things, but once I saw the basement walls I knew I didn't want it. Signs of water intrusion, shear wall cracks and a horizontal crack on all 4 walls. So I told my agent to let them know that unfortunately there were too many things wrong with the property and I have to use my inspection contingency to get out of the contract.
The agent told me the sellers don't want to cancel and have a right to make repairs. So I asked him to make a list with all the mistakes on the inspection. He did and we sent that over. Apparently, the sellers had three days to get back to us about these repairs but didn't until 8 or 9 days later. At that point, they said we need a structural engineer to inspect the property if we wanted them to address the structural issues. They said they'll fix the rest. I'm not sure if they did or didn't because they took too long to even reply. When my agent told them that the contract is void because they didn't have the standard 10 days to reply, but 3 according to our contract, they said they are going to sue us.
They dragged out the threats for two months. In the meantime, I ended up buying a rental in Chicago. I found out that the sellers and the selling agent's firm didn't have a contract signed so the agency sent me my earnest check back. I thought it was all done until I got a call from the agent today asking if he can give the lawyer my number.
I really don't have money to hire a lawyer right now and am unsure what to do. I always thought that if you operated fairly and honestly you wouldn't need to lawyer up and try to protect yourself. What do you think I should do? Should I hire a lawyer to speak with this lawyer on my behalf? I am honestly thinking about representing myself if this turns out to be a real lawsuit. If you have a good lawyer for Wisconsin, please let me know.
All in all, our next step into real estate wasn't as good as I thought it would be. Bad things can and do happen. I will keep you updated on how this turns out because this can honestly happen to anyone.
Thank you.
@Brett Cox haha when you put it that way it makes a lot more sense. Let's see how it plays out. The lawyer will start on Monday...
Hi Ben
Although I can't give any legal advice, the story you just shared make all contract seekers aware of the nightmare you can get yourself in, just by trying to do business in the real world. the issues you just shared will help someone else out down the road in a similar situation. So, thanks so much for the heads up and also, to all the helpful responses shared in this post as well
Vernon
Wow 4 pages of discussion over this? Until you get served court papers, don't spend money on an attorney or talk to anyone from the seller's side. There is absolutely NOTHING good that can come from speaking to their attorney.
Ugh, their threats are just idiotic and so are they. They didn't reply within the response window and you have a right to walk away as a result of the inspection as long as your inspection was within the inspection contingency window. I would laugh at them and outright call them idiots to their face then go sleep like a baby.
Originally posted by @Ben I.:
@Jay Hinrichs the lawyer called me today but my phone never rang, it went straight to voicemail. In the voicemail he said he has his marching orders to start on this Monday and was giving me a courtesy call to talk it over beforehand. I called him right back but he didn't reply. I highly suspect he wants me to stress about it over the weekend which is exactly what I won't be doing.
Do NOT call him back. Lawyers usually send demand letters, they don't usually call. These idiots have ZERO leg to stand on. The contract is void, they didn't respond within the time window of the contract. I'd frankly ignore these idiots.
Originally posted by @Brett Cox:
@Ben I. Nothing to worry about. All bark, no bite. Empty threats and bullying. Don’t be controlled by fear. Especially if you did no wrong!
Now send me $1000 for my advice or I’m going to sue you!
My bs threat should scare you as much as theirs...none.
Your post has offended me, I'm going to sue you unless you pay me $100,000. You have 1 hour to pay...
Note: this post is a joke, everybody lighten up. Can I have the sellers contact information? I will entertain myself with these morons.
@Jack B. Thankfully I don't have that lol. I got very frustrated that people think it's ok to get upset about losing a buyer and threaten to sue. Just move on.
Sounds like total BS
Tell your agent that you do not give permission to give out your phone number or any contact information (don't make it easy for them) Not under any circumstances!
If they are going to sue let them serve you first. At that point (once you have the complaint) talk to a lawyer.
DO NOT skip the lawyer but it sounds like you don't need one. Not yet.
Originally posted by @Ben I.:
@Jay Hinrichs the lawyer called me today but my phone never rang, it went straight to voicemail. In the voicemail he said he has his marching orders to start on this Monday and was giving me a courtesy call to talk it over beforehand. I called him right back but he didn't reply. I highly suspect he wants me to stress about it over the weekend which is exactly what I won't be doing.
First, little google to see if this "lawyer" is actually a lawyer..... and currently licensed. Probably a good idea to cross-check the name w/ the phone number as well....
But I wouldn't call back, no point and just makes his life easier. Make them contact you through proper channels.... and then have your lawyer respond. If you're still curious from time to time in the future, just check WI casenet to see if anything ever pops up (doubt it). At best you're going to give them an answer/proof that this case isn't worth it..... at worst you say something you shouldn't and they go after you. Either way, you literally gain nothing....
I know you have the urge to defend yourself and your honor/integrity/make a point.... but as much as you want to do that not worth it.
@Ben I. Good luck brother! You will do well.
@Ben I. I simply would talk to their lawyer directly and expose your point of view, and the facts as to how you acted as per contract terms. Hopefully he will realize he has no case, and advise his clients. I would not hire a defense attorney (unless is free consultation) until you get an actual summons by the court, because until then it can all be threats and just talk.
@Ben I.
I would talk with seller's lawyer. Be brief, don't give out any information but let him know you will talk more once he can supply you with a fully executed purchase agreement. He should quickly realize he's wasting his time.
@Ben I.
I am not a lawyer but as an associate real estate broker I wouldn't think that the seller can legally sell their home if there is a lawsuit in motion. So once they get another buyer my guess is that they will drop everything with you and just move on.
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Originally posted by @Cindy Mastin:
@Ben I.
I am not a lawyer but as an associate real estate broker I wouldn't think that the seller can legally sell their home if there is a lawsuit in motion. So once they get another buyer my guess is that they will drop everything with you and just move on.
this is not correct. the buyer would have to file a lis pendens seller in this instant will not sue him/her self. but its just
saber rattling and it worked.. you cant see the inside of a court room without both sides spending at least 25k each. highly doubt that will happen..
- Jay Hinrichs
- Podcast Guest on Show #222
Wow, what a wicked and perverse person is that.... I think that they are just trying to scare you into either buying it or giving them free money. But I think that if you don't go that path, they will flee, because the wicked flee when no one is pursuing.
Also two things: In my state, there is a Business of Professional Regulations. No one wants complaints by them. You might contact them if that exist in Illinois.
Also, don't most contracts to buy have a contiguity clause on them? That might help.
But it is a good idea to get legal advice.
In the mean time, don't *worry." 90% of what people worry about never happens. (That doesn't mean worrying works!) I'm so sorry for your hard time. Crazy.
@Kees Boer I'm not sure what a contiguity clause is. I guess my lawyer will have to look into it if they actually file a lawsuit.
To everyone else, I don't talk to the lawyer except to tell him to look at line 219 of the contract and to tell him that if he sues my lawyer and I will seek any available legal actions.
The lawyer called me and already lied. He said my agent told him to call me but my agent was asked if he can provide my info and then called me to ask permission. A small lie but not the truth nonetheless.
Originally posted by @Ben I.:
@Kees Boer I'm not sure what a contiguity clause is. I guess my lawyer will have to look into it if they actually file a lawsuit.
To everyone else, I don't talk to the lawyer except to tell him to look at line 219 of the contract and to tell him that if he sues my lawyer and I will seek any available legal actions.
The lawyer called me and already lied. He said my agent told him to call me but my agent was asked if he can provide my info and then called me to ask permission. A small lie but not the truth nonetheless.
What I was referring to is that many contracts to buy, at least the ones that I have signed have a clause in them that says that the purchase is dependent or contingent upon the results of the inspection and that the buyer can back out of the deal for whatever reason he/she feels fit, until closing. Afterwards of course they probably can't return it. That would be Walmart... where one can do that. :-)
On the bright side, you might learn a lot from this! Also, since the scenario is so low-risk, it will hopefully be a cheap education. It sounds like they have no claim so it is just a ticket to view the process. Perhaps you could treat it like a course in the practicalities of people abusing the legal system and how to respond. In Madison we have a 'de novo' review process of any small claims cases. So if this happened in Madison, (as a small claims case ie <$10,000) I would usually tell a person if they want they can be their own lawyer and try to win the case themselves, learn a lot, and see what it is like. Then, even if they lose before a commissioner, they get to "appeal" the case for free to a real judge due to 'de novo' review. For the "appeal" (de novo means roughly "new trial" so the judge ignores the first trial) they could hire a lawyer to make sure they do not lose. I have seen many people win, some lose and come back to do the second round with counsel.
In any case, these kind of bullies rarely go away immediately when you stand up to them. They usually will persist awhile and try to feel you out. But if a person just keeps emotional distance from such rather obvious scare tactics they would hopefully be fine. Eventually every bully seems to just move on to weaker targets. And even more eventually, the bully hopefully slips up and faces justice themselves.
Best wishes!
@Ryan Seib very interesting. There was a time in my life when I would have wanted to do that but right now with three kids I'd rather not have to travel from Hawaii to Wisconsin for court dates.
Originally posted by @Ben I.:
Hiya all. Well here's my situation.
I wanted to buy a second rental property after we moved to Hawaii for work and became bankable again. I was planning on using the HELOC money from our first rental as the downpayment. I found an agent here on BP from Wisconsin because I wouldn't buy in Hawaii and I wanted to get out of Illinois because the taxes were too high.
So I found a gut rehabbed 2 flat in Milwaukee Wisconsin. I put an offer and it was accepted. I sent the earnest money in time and scheduled the inspection. During the inspection, we found out much of the work was done poorly, including plumbing that didn't lead anywhere. We weren't able to inspect the electrical system because it was turned off from the main. There were other little things, but once I saw the basement walls I knew I didn't want it. Signs of water intrusion, shear wall cracks and a horizontal crack on all 4 walls. So I told my agent to let them know that unfortunately there were too many things wrong with the property and I have to use my inspection contingency to get out of the contract.
The agent told me the sellers don't want to cancel and have a right to make repairs. So I asked him to make a list with all the mistakes on the inspection. He did and we sent that over. Apparently, the sellers had three days to get back to us about these repairs but didn't until 8 or 9 days later. At that point, they said we need a structural engineer to inspect the property if we wanted them to address the structural issues. They said they'll fix the rest. I'm not sure if they did or didn't because they took too long to even reply. When my agent told them that the contract is void because they didn't have the standard 10 days to reply, but 3 according to our contract, they said they are going to sue us.
They dragged out the threats for two months. In the meantime, I ended up buying a rental in Chicago. I found out that the sellers and the selling agent's firm didn't have a contract signed so the agency sent me my earnest check back. I thought it was all done until I got a call from the agent today asking if he can give the lawyer my number.
I really don't have money to hire a lawyer right now and am unsure what to do. I always thought that if you operated fairly and honestly you wouldn't need to lawyer up and try to protect yourself. What do you think I should do? Should I hire a lawyer to speak with this lawyer on my behalf? I am honestly thinking about representing myself if this turns out to be a real lawsuit. If you have a good lawyer for Wisconsin, please let me know.
All in all, our next step into real estate wasn't as good as I thought it would be. Bad things can and do happen. I will keep you updated on how this turns out because this can honestly happen to anyone.
Thank you.
I'm coming to this thread late & haven't read all the responses. Here's what I would do:
Do not talk to the seller's lawyer
If you have a signed agreement with your agent instruct the agent not to talk to the seller's attorney.
Interview some WI attorneys now so you're prepared if a suit is filed. While the thought of billable hours is scary a good attorney should be able to kill this threat. If a suit is filed you're prepared. If a suit isn't filed at least you'll have an attorney for your next deal in Wisconsin.
Originally posted by @Ben I.:
@Kees Boer I'm not sure what a contiguity clause is. I guess my lawyer will have to look into it if they actually file a lawsuit.
To everyone else, I don't talk to the lawyer except to tell him to look at line 219 of the contract and to tell him that if he sues my lawyer and I will seek any available legal actions.
The lawyer called me and already lied. He said my agent told him to call me but my agent was asked if he can provide my info and then called me to ask permission. A small lie but not the truth nonetheless.
DO NOT TALK TO THEIR LAWYER. Not a word. Multiple people told you that... Do you realize how many people think they will help their case by talking to attorneys or police and end up screwing themselves? There is nothing you can say to stop this attorney if he really plans to sue you. He has the contract and read it before he called you. There is nothing good that comes from you talking. Anything you say just tips your hand.
Originally posted by @Ben I.:
@Ryan Seib very interesting. There was a time in my life when I would have wanted to do that but right now with three kids I'd rather not have to travel from Hawaii to Wisconsin for court dates.
First of all, to be sued they need proof of service. Proof of service occurs only two ways, certified mail receipt or a process server at your door. Simple solution is don't answer your door and don't collect certified mail. If they cannot serve you, there is no court case.
Secondly, you do not need to travel to Wisconsin. Your attorney can represent you without you being there.
Originally posted by @Ben I.:
@Jay Hinrichs the lawyer called me today but my phone never rang, it went straight to voicemail. In the voicemail he said he has his marching orders to start on this Monday and was giving me a courtesy call to talk it over beforehand. I called him right back but he didn't reply. I highly suspect he wants me to stress about it over the weekend which is exactly what I won't be doing.
Ben, do not call him back!
You have nothing to gain by doing so. NOTHING.
No matter how nice an attorney may be (and some actually are nice people), they're hired to help their client. It's normal to think you can work things out or come to some understanding.....I'm telling you from first hand experience, it's a false confidence. "Anything you say can and will be used against you" firmly applies.
My consult is free. However, if you call him, I'll bill you $1000. >:-)
Originally posted by @Brandon Arce:
@Ben I. I simply would talk to their lawyer directly and expose your point of view, and the facts as to how you acted as per contract terms. Hopefully he will realize he has no case, and advise his clients. I would not hire a defense attorney (unless is free consultation) until you get an actual summons by the court, because until then it can all be threats and just talk.
This is bad advice, you do NOT talk to their lawyer. Their lawyer has no power. He is not a judge to convince for God's sake, this is terrible advice. The only person you need to convince is a judge/jury IF it ever goes to court. This would be so easy to throw out via a motion for summary judgement to dismiss with prejudice, the defendants attorney could literally motion the court right away pointing out the contract, response time was breached, etc. and a judge would immediately throw the suit out with prejudice (cannot be filed again).
I don't know why this is such a big thread/some are giving bad advice to convince their lawyer. These morons are in breach of contract. This is easy to prove. They have no case. This will never make it to trial, and I promise you they are not going to hire an attorney and have you served by a process server. Any attorney worth their salt would know this is a frivolous suit which would get them in trouble...
@Account Closed I was probably being pedantic but that’s because I had been drinking.