All Forum Posts by: Brian Ness

@Adam Odom thank you for the response, I appreciate the central point of your post. Our eyes will become more trained as to repair estimates as we move forward. Some context to our complaint: Approx. seller equity at our original contract price we estimated at 92k. He ended up deeding it to the third party, outside of our purchase contract, for 25k. That included satisfying bank fees. The original owner ended up getting less than 25k. After Inspections we countered the new owner at a price that would have given the original seller at least 50k in equity, but was 20k less than our original offer. We followed with an offer that would have given the original owner 65k of his equity. The new owner declined both offers and we terminated our contract.

Greg and Mike, thank you for the responses as well. From our point of view, we lost out on the ability to negotiate a great deal on a distressed property. This new investor was sophisticated and clearly knew what to do to get into a great position. We learned. The question I'm trying to answer for myself is that of the obligations of the seller agent and seller. If they were not obligated to seek a deal with us, to stop foreclosure, before bringing in this third party, then my question is answered and we'll move on.

Thank you for the response. Our buyer's agent contacted us within minutes of this property being listed on the MLS, He's been a great guy to work with. We scheduled a viewing and we made an offer the next morning, which was accepted. The seller agent advised us that the property was facing foreclosure a couple days later after we had gone through the property with a contractor, but before we had paid for an inspection. Later, we were advised by the seller agent that the new owner wanted, and was obligated, to honor our original contract, so we proceeded with our due diligence. We found the extent of our repair costs and attempted to negotiate the price accordingly.

The heart of the question I'm asking is can this: Do we have ability to get into the position of this new investor on the basis that the seller didn't have the legal right to sell the property to him? If not, then we will have to chalk this up as a learning opportunity. Specific performance on the contract wouldn't benefit us, as the extent of the repairs the property requires makes our contract price much too high.

We are new investors trying to put together our first deal and working with a real estate agent. Our agent found a distressed property, which was listed on the MLS, we thought it had potential and we made an offer. Our offer was accepted, signed and we put up 3k Ernest money. The seller was facing foreclosure, a fact we did not know about. Now it looks like the seller just deeded the property to another investor (apparently an acquaintance of the seller agent) for 25k in return for the new investor receiving title. The bank agreed to stop foreclosure and the existing mortgage is still in place. The seller's agent brought this other investor into the deal, despite the existence of our purchase contract. Now we're told that this new seller has stepped into the place of the previous one, and wanted to proceed with our purchase contract.

I would have thought that the seller's agent would have been obligated, when facing a foreclosure deadline, to seek a cash offer from us to stop the foreclosure first before bringing in a third party. What should have been a good deal for us to negotiate was given away by, in my opinion, a dishonesty dealing seller agent. By our estimate, our position is harmed by approx 50k. We had paid for a contractor estimate and an inspection and would have been looking to negotiate down the price significantly; which clearly the original owner had equity and intention to negotiate. Now the new owner is unwilling. Does anybody have experience trying to remedy a broken contract anything similar to this? Trying to decide if its worth getting an attorney involved or just to learn and move on. Thanks for any input.