Seller tryin to sell to another buyer after gettin in a contract

[Gorden Lopes]

Hey Guys!

Just wanted to get your thoughts on this. There are bunch of other discussions around this issue but wanted to get Alabama specific info.

I got into a contract on a house through a wholesaler couple of weeks back for a property near Huntsville and we sent all our paperwork to the closing attorney for preparation of closing. I verified that the wholesaler had the signed contract on the house with the buyer. But then after couple of days the owner went MIA and did not answer the wholesalers phone calls. We then went ahead and filled a memorandum of contract through our title company. Through the HOA office we ended up finding that the owner has another title company working on a contract with another buyer and the other title company did find our memorandum of contract when they did their title search. I know crazy times!

So here is my understanding based on what my escrow company has said. We were scheduled to close on 12th of this month, if the seller (owner) cannot perform on this contract then we can pursue legal action agains the owner. 

But I have few questions to understand this little better

1. Can the other title company still go ahead and close the transaction with buyer 2 even when the title is clouded? Or do they need to make sure that the title is clear? Trying to understand who has the leverage here.

2. Since we know that this other title company is working with the owner, can my attorney preemptively talk to them about this?

Has anyone else faced this issue before and what was the outcome? 

[Caleb Bryant]

*Note* def not an attorney and I'm not giving legal advice haha. If the wholesale contract has been recorded with the memorandum, then you should be good. When this situation happened to us they could not sell due to clouded title. We were paid our fee when they closed with the buyer they decided to sell to instead of us. In our case there was no back end buyer signed yet so no further action was needed, and we didn't want to renovate the property to rent so we felt us getting our projected fee was enough. We had spent a lot of time on the deal so we weren't about to get cut out entirely though.