Seller unable to close escrow due to 2nd lien

[Alex Smith]

Hello,

I am a first time homebuyer and have had a house under contract in Texas for one month. The close date is next week (5/30). Late last week the title company informed my realtor and I that the seller has a second lien on the house, and if unresolved, will not be able to sell it.

The contract we used mentions a return of only earnest money if the title is not cleared. However I’ve been told that the seller failed to inform their agent that there was a lien. Therefore the house should not have been put for sale in the first place. I’ve fulfilled everything on my end of the deal and spent $1,500 in inspections, appraisal, etc and would want to get that back in addition to earnest money should the deal fall through.

The house is vacant and the seller has already moved out, so it seems it would be in their best interest to close this deal. But with the close date approaching it does not seem like they will. In the event the title does not clear, what options/legal options are available? What would you do?

Thanks.

[Ronald Rohde]

May need a demand letter to title company, but yes, unlikely you will recover due diligence costs. You can hire me for $10,000 and sue the Seller to recover $1,500 if you like.