Gary Morris : They may own it forever

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They may own it forever

By: Gary Morris
Wednesday, May 09, 2007 12:43 PM

I am just about out of ideas. I have an accepted offer on one of my listings. Buyer has financing ready. I have ordered title commitment (seller's agent handles that in Indiana). Title commitment comes back with usual stuff about taxes and existing first mortgage are liens on the property. There is also a second mortgage, a seller carry-back that was also recorded. Seller said this was forgiven at closing. I said "produce proof". She provides unsigned letter of forgiveness and an addendum to the purchase agreement stating the carrryback would be forgiven at closing, also unsigned by either party.

Original seller has been contacted and refuses to sign a second letter. She states that the buyer, (my seller), had the paperwork written and were supposed to bring it to closing but they "forgot" to bring it. Closing happened anyway. Original seller states she signed letter of forgiveness outside closing, faxed copies and mailed originals to my current sellers. They should have had the document recorded but never did.

Now we are days from potential closing, original signed letter can't be found, original seller refuses to help.Any ideas? I think if the letter is not located, I will need to notify the buyer's agent that we can't provide clear title and the deal is dead. I also see myself telling my seller that I hope they like the condo, because they are going to own it forever.

Comments

Member Since '06	Todd Clark said: I'm with you, unless that is paid out of closing or the origanal sellers sign that, it could be theirs forever. May 9, 2007 11:01 AM
Member Since '04	Ron Tarvin said: Could the disputed amount be held in escrow at closing? That would allow closing to occur and if the parties can come to terms, then so be it, otherwise, the item gets paid off and the OLD seller gets over but your NEW sellers are free of the condo. Perhaps OLD sellers would agree to sign new documentation for a doc prep fee or some other compensation item, to be paid out of that escrow after closing??? May 9, 2007 11:13 AM
Member Since '07	Gary Morris said: Ron, I have thought about me or my broker contacting OLD seller to see if we could pay her a doc fee to sign again. I really don't think she will do it though. I guess she had problems with her buyers (my sellers) throughout her transaction with them. May 9, 2007 11:19 AM
Member Since '03	Gary Szolosi said: I would have your seller contact an attorney. Some time a release written and sent by them carries a little more weight. In addition there may be other ways to handle this that they would be aware of. Good luck! May 9, 2007 12:05 PM
Member Since '03	Mark Cohen, Broker said: See if the sellers attorney can get a Power of Attorney from the lien holder and then execute the forgiveness document. May 9, 2007 12:20 PM
Member Since '07	Vicki Reynolds said: Have you contacted the other Realtor? She may be able to gain something from her clients. May 9, 2007 12:20 PM
Member Since '07	Klaus Nicholson said: I feel for you Gary, but I have no advice. May 9, 2007 2:10 PM
Member Since '04	Mary Welch said: Gary, I agree with Gary S. there may be a way to get through this and I wouldn't give up on it without bringing in the weight of legal counsel. Let us know how this works out. May 9, 2007 2:25 PM
Member Since '07	Gary Morris said: I will suggest to my sellers that they seek legal counsel and see where it goes from there. I'm not giving up without a fight. I just feel bad for the buyer in this deal, he wants the condo badly, has borrowed 401K money just to get it and now my own sellers are causing everybody grief. How many of you have a title search done when listing a home to avoid these issues? May 9, 2007 2:39 PM
Member Since '06	Gary De Pury said: I would contact an Attorney and have the attorney send a letter to the previous sellers. Or a third party who is a very skilled negotiator. The Previous sellers have nothing to gain by holding up the sale. But they have Attorneys fees to lose should the current sellers decide to sue and win. Here is why.... The previous sellers have admitted that the loan is not valid. Therefore they cannot collect for fear that the current sellers somehow find the signed document. Putting them in a fraudulent position. OR The current sellers could sue. Win or lose they are going to cost the previous sellers time and money. Money that the previous sellers are not going to spend just to be jerks. Lastly, I thought this forum needed three Gary's to chime in. May 9, 2007 3:16 PM
Member Since '07	Gary Morris said: Gary's rule ! ! Just an update for everyone. I told my sellers it is do or die time. They need to produce a signed document somehow, either by contacting the previous seller directly or through a real estate attorney. They have contacted their real estate agent that helped them purchase the condo who in turn contacted the seller's agent who remembers the entire episode. He or she is supposed to contact the seller to get a signed release. We'll see. Thanks everybody for your input. Gary May 9, 2007 5:42 PM
Member Since '06	Laurie Skinkle said: I know where to come when things get Snafu'ed! Ron you are a great out of the box thinker and yes, the Garys rock too. May 18, 2007 9:30 PM
Member Since '06	Gary De Pury said: The problem with the title company holding an Escrow amount is that in this type of situation, they could get caught short. If the attorney's fees, interest, and any penalties doubled or tripled the projected cost then the title company would have to pay. Remember they are insurers. When have you had an insurer say......Hey, don't worry, let me get that for you. I have been there and done that. The seller had to pay an unlawful lien and then sue to reclaim. I would love to hear a dissenting opinion on this. Gary De Pury May 19, 2007 5:53 AM