Hi All,

• My partner and I have a house under contract (we had planned to BRRR)
• Son of the widow living there has power of attorney and is selling due to moving his mother to assisted living in February
• We issued an As Is cash offer with 3 months free rent upon closing (they needed to be in the house until no later than February)
• Once under contract, he looked at comps and realized that the house is worth quite a bit more
• We get notified on Monday that he found mold in the kitchen, but wouldn't comment on the extent
• We offered to have a professional come out to determine the severity, but he declined saying that he's started kitchen renovations already
• Today we learn that he wants to terminate the contract so that he can renovate the kitchen and then we are free to make another offer (he thinks the discovery of mold is enough to terminate)

TLDR: I have a seller with cold feet after he found that he agreed to sell his mother's home for less than its worth.

Has this ever happened to anyone? How did you handle it?

what kind of deal did you get on the place?

https://www.hedrickkring.com/attorneys/joel-b-bailey/

Give Joel a call. He's an aggie, good guy and will tell you if it's worth fighting or not and shoot you straight. He helped me with a real estate issue last year.

Sale price with 3 months rent was $135k cash. Comps are going for $180k.

We had sellers try to back out on us before. They told us they changed their mind about moving (when before the story was that the husband got a new job elsewhere) and wanted to stay in the house. We already had a contract on the house we were selling & there was really nothing else on the market that would have worked for us, so we had an attorney send them a letter explaining why a contract is a contract.

It worked, but they left grudgingly. They took all of the manuals & the building plans that they said they'd leave because they showed where all the piers were under the slab, etc. They also poisoned the neighbors against us - that didn't last long when we actually met them, but it there were some dirty looks & some unrequited waves at first. Turns out they did move for that job, so we guess they had a better offer.

Send a letter - shouldn't cost too much & when they see they can't get out of it without a lot of trouble & expense, they might back down.

Not sure I'd want a contract on a house where they are tearing things out though. Can that be stopped? Who knows what kind of work you'll get stuck with. If anything, they should be taking less for you to deal with it. IMO

Did you use a standard TREC contract? In any event, you should be in a good position to where they can't stop the sale without significant financial risk.

I've always heard that courts are very hesitant to invoke specific performance if a seller is living in the home. Not sure if that is still the case.

One thing that the seller is willingness to sell it at a higher price negate that.

Who knows...I just don't think it's an open and shut case.

We did have a seller back out and legally, there wasn't much we could do because he did want to stay in the house. The realtor made us whole on costs because he had some legal exposure.

But if he's planning on relisting it, you have way more options. I would at least run it by an attorney.

How did a realtor have legal exposure? It's his yahoo client that backed out.

Yep, Seller would be forced to cover legal costs from Buyer. Most Buyers and Realtors are scared to go legal though.

It was a mother and son who owned the property, the mom lived out of state. She knew the son was selling the property but to make it easier the son was forging her signature/initials in DocuSign and the realtor knew that.

Wow, yep that's quite illegal

Agilaw said:

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Not sure that are reluctant to enforce specific performance, it's that most buyers don't want to go through the process of seeking specific performance. I certainly wouldn't let the Seller walk away simply because they now want a better deal.

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Since we had a seller who wanted to stay in the house, a lawyer advised us that there was no way we would win specific performance in court. We could go after him for a judgement. But he was broke, trying to sell his house to cover costs from a felony charge during a bar fight, owned two pit bulls that he couldn't move into an apartment, and found out his girlfriend was pregnant between listing the house and closing. There was no way we would have seen a dime.

aggiejumper said:

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Yep, Seller would be forced to cover legal costs from Buyer. Most Buyers and Realtors are scared to go legal though.

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most judges are hesitant to kick people out of their homes too.

doesn't mean the seller isn't in the wrong, or they would get away without a monetary judgement.

Specific performance

On facts as stated, putting pressure on the son (POA) would likely lead to a favorable outcome. Also very possible to accomplish a favorable result without litigation.

If you won a judgment, you could put a lien on the house.

Update:

• I've reached out to Joel who has offered to take a look and I'm waiting on feedback.

• My partner in the deal has filed a Memorandum of Contract.

• The seller has now apparently hired a friend/realtor who has been trying to poke holes in the existing contract. He may have found something and I'm curious what the TA experts think...We had to change title companies a few days after the original contract was signed. An amendment wasn't immediately executed and now the seller is not willing to sign anything else hoping this title company change will break the deal.

Thoughts?


Also, I'm cracking up at a lot of the responses. Real estate is fun isn't it?

Yes, but when they win, and they will, they will recoup all of those legal fees.

Joel will tell you what type of case you got and the pros/cons of going through with it. He'll do whatever you ask in the end, but you'll know your odds and if it's worth pursuing. He's a good person and a good lawyer.