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?