Buyer failed to perform

[Terre Tulsiak]

I signed a contract with buyer that stated closing date was Sep 14 or 30 days after tenants vacated WHICHEVER CAME FIRST. I notified him of tenants vacating on July 6 which he already knew because he had offered to pay moving costs , he was so anxious to do the deal. The closing date was set for Aug 18 and I appeared at title office but they hadn't received funds yet. They had sent HUD docs the day before. I found out later that buyer was doing a double close, rather than assigning, since he assured me he 'was developing it himself'. No biggie, but the second buyers walked when they saw the HUD statement, realizing they were paying too much, so my buyer was scrambling to find new buyer.

He refused to cancel contract even to get his deposit back and several days later attorney wrote letter threatening to sue to compel enforcement of contract, which they did after changing title companies. I signed addendum to transfer deposit to new title but it was a scam- intending to extend contract- he told me he was worried about losing money, disappointing family, etc. Now he has filed a lis pendens clouding title to prevent sale , causing loss of good tenant for 3 months. I only agreed to sell because Im getting divorced and need cash , my daughters tuition at Notre Dame overdue. 

Who will win a law suit? Should I countersue?

[David Lee Hall, III]

@Terre Tulsiak

@Wayne Brooks is spot on. He is feeding you BS or just screwed up. You do double closing in a handful of scenarios, but generally it is so your buyer doesn’t know how much you are making and so your seller doesn’t realize someone is paying more for their property (which could have them go around you to the true buyer).

a) they were not honest that they were not buying it themselves

B) they screwed up if the real buyer found out what they paid you

C) they screwed up telling you there was a double closing, the point on these is true buyer and seller don’t meet

D) it sounds like you screwed up by signing an open ended contract BUT the way you phrased it about the 30 days part, look for the term “time is of the essence” in the contract. If it is in there, you are out of the agreement and can sell to someone reputable- heck post it on BiggerPockets

Overall, if all things are equal, keep his hand money and walk away/fin$ another buyer. Your lawsuit is likely pointless as he doesn’t have the money if he is operating this way. If he did he would have closed in place of his buyer and resold it afterwards.

This is the type of guy that gives wholesaling a bad name.