Buyer going behind my back! HELP

[Liam D.]

Had a pre foreclosure property under contract and had assigned rights to buyer for an assignment fee. The buyer originally intended to use a hard money lender that could not get their third party appraisal done in time to close. 

Time was a factor as the bank was set to take the property back and we had pushed the closing back one day before it became REO. The buyer then decided to use a private lender that had also failed to get him the funds to close on time. One day before foreclosure with angry sellers and a buyer without funds...

The buyer then decided to make the payment on the property out of his own pockets to get it out from foreclosure and ensure more time. At this point, our first closing agreed upon in the purchase and sale had came and past.

After he had made the payment to get the property out of foreclosure I had thought he was going to use his original preferred lender to close although took his time and waited. He is now in a lease option agreement with the original sellers and is stating I will get my assignment fee when the property is finished rehabbed and sold (likely months away). 

I had several other investors lined up interested in this deal... Could I have assigned it to a different buyer once the original buyer had broke the terms of our agreement? Contract does not mention requirement for mutual release.

All responses are greatly appreciated! 

[Will Barnard]

No offense but I feel bad for the original seller more than you. You contracted there home to purchase it without the willingness or ability to close on it and then you tried selling your contract to a party who also did not have the ways or means to fund it (or is very savvy, saw you are not and delayed on purpose to cut you out of your wholesale commission). If the later is the case, unless your contract with that buyer had specific performance language in it, there is nothing you can do.

As to the advice above about potentially clouding title, you are now entering the legal realm and you should NOT be taking legal advice from anyone other than your attorney as clouding title in THIS case can swing back at you from the original sellers for not performing and claiming damages against you.

If you intend to wholesale, you need to do it legally and ethically and in many states, that requires either a license, closing on it with your funds or borrowed funds, then marketing for resale once you have title, or having your buyer upfront, forming a legal entity with both you and buyer as owners. On top of that, full disclosure to the seller is likely required and anything short of that can land you in a pile of trouble.