Specific Performance is a dud; what now?

[Geoffrey Pierce]

Seller balked at closing then sold the lot to a 3rd party before out closing date even arrived. Consensus is that Specific Performance suits aren't worth it for this small of a deal (Still worth 25k to me). I'm told the "innocent" third party makes it unlikely a judge will vacate the sale and order seller to sell to me.

I previously clouded title with a memorandum when she balked and before the sale. My question is, is it worth leaving it until the buyer tries to sell or finance? Am I the a-hole for wanting at least my costs back, if not lost profit? How likely is a $5k or $10k recovery from the buyer to rescind the memorandum?

[Jay Hinrichs]

Originally posted by @Geoffrey Pierce:

Seller balked at closing then sold the lot to a 3rd party before out closing date even arrived. Consensus is that Specific Performance suits aren't worth it for this small of a deal (Still worth 25k to me). I'm told the "innocent" third party makes it unlikely a judge will vacate the sale and order seller to sell to me.

I previously clouded title with a memorandum when she balked and before the sale. My question is, is it worth leaving it until the buyer tries to sell or finance? Am I the a-hole for wanting at least my costs back, if not lost profit? How likely is a $5k or $10k recovery from the buyer to rescind the memorandum?

Cost of litigation will exceed what you will get or at best be break even..  Clouding ones title is a BUSH league move..

I have done Specific performance exactly 1 time .  And the ONLY reason I did was that I had given the seller 60k non refundable and released to her and come the closing day she would not close.. ( extreme Hoarder ).. I had no choice at that dollar amount.. It was not just the subsequent profit ( we developed it into 3 600k plus homes) so big up side  but it takes time and money to do that in our market..

We won..   Now what many dont realize and this may not be true in your state but to win a specific performance suit.

If your contract like most of us in the distressed asset business pay cash .. you must on the day of closing have all your cash sitting in escrow ready to close.. And then if your going to Sue you leave all that cash their until you go through the 18 month to 2 year litigation process.. So in our case low 6 figures was placed into escrow and sat there.. 60k was passed through.. etc etc..

So you have to look at the economics.. and the laws of actually prosecuting a SP case..  laws are state specific of course this was Oregon. 

[Charlie MacPherson]

@Geoffrey Pierce I don't know if it would work, but you might come up with a figure for your damages and take it to small claims court.

I've done it twice.  The filing fees tend to be cheap and the process isn't as rigid as in a higher court.  It might cost you <$100 in fees.

Gather evidence, prepare a concise case and present it to the judge or magistrate.  You might pay an attorney for an hour of his time to help you to prepare.

Good luck!