Seller backing out ... what is the rule?

[green_erin]

Hi,

I am new to this board and I am quite new to RE investing as well. Recently, I found myself a nice 6 units apartment building at below market value and went into contract with seller. Seller never mentioned that he didn't own that property, he had land contract with the 6-plex owner. (I don't know what is land contract).

During due-diligent, I discover from Preliminary title report the actual owner and asked seller about it. Seller told me not to worry. He is convinced that 6-plex owner is going to sign somekind of paperwork that will allow him to sell that property to me. But as it turned out, 6-plex owner refused to sign and seller was going to go into lawsuit with owner to get owner to sign. But several weeks had passed and seller decided that he was not going to persuit with the lawsuit. This leave me out in the dark, if owner won't sign, then seller can't sell and I can't buy the property since the title is clouded.

Several realtors had advised me to talk with attorney, I have called several attorney myself but attorney wants to get paid upfront. I have spent a lot of money and time during the due-diligent that I am not sure if I should invest anymore money into this deal.

Does anybody have experience such as this before? Seller can keep earnest deposit if buyer do not perform or walk out from the deal, but what can buyer do if seller just walk away from the deal such as in this case?

Any advise is appreciate.

Thanks

[tedjr]

Howdy Green:

Probably best to get your money back and find another deal. Sounds like your seller did not commit fraud and truly thought he had the deal worked out. The seller may help cover some of your expenses but I kind of doubt it. You can ask nicely and try to work it out.

You could sue and spend thousands in court and tie up both sellers from selling the property for a while but you will probably not win.  Courts do not like to force people sell property. Even if you do win it will be at a high expense and may not be worth it financially and emotionally.

Maybe you can contact the true owner and work out a deal at a later date to buy the property. He will probably want a higher price and it may be more than you want to pay.

My advice is to cut your bait and losses and get a new hook.

LOL