Real Estate Deal gone bad... elderly seller shakedown?

[ultrarunner]

My 80+ year old retired friends closed their business... business has been in a decline for the last 10 years due to health issues.

In 1965 they bought the Duplex next to the their little shop with expansion in mind... over the years it has been rented to tenants with the last one moving out about 3 years ago.

They list the property for sale with a Realtor and accept an offer with them carrying the note... not sure why at 80 why they would do this?

Buyer goes to the city and the city cannot confirm legal status of two units... in fact... the ONLY record the city has if for a sewer replacement 15 years ago. City says records pre WWII often do not exist

Now the County has detailed records going back to 1920's showing two units with two utility meters, addresses, kitchens, etc. I went with my friends and the Country provided a certified copy of the building record and everything matches the physical site.

The property is being sold As-Is and was listed as such and seller made no representations other than clear title.

The prospective buyers just sued my friends saying they were misled demanding $5000 to cancel escrow claiming they are out money and time...

Title Company wants this resolved... My friends had already signed an Escrow release weeks ago when the buyer was out of contract and wanted a 50% price reduction.

Craziest thing I have ever heard...

I guess the only thing is to let it play out?

Welcome to Real Estate in 2016

 

[EddieWalker]

In my experience, the title company doesn't have any right to demand anything. Just ignore them. Was a lawsuit filed in court or is this just a threat to try to get money out of your friend?

 

[ultrarunner]

They received a demand letter from a lawyer with a copy to the Title Company.

No notice of Lis Pendens that I know.

My friends have a backup offer for a little less from a local contractor... Title Company says now that it has been put on notice it must act accordingly.

I would imagine they could bypass that Title Company and use another.

Never heard of a buyer suing for to be reimburse for due diligence research...

 

[EddieWalker]

I've had lawyers contact me and make demands several times. In every case I told them no and they disappeared. I don't know the law there to give advice, or any of the details, but I do know that lawyers bluff all the time. They send out letters making demands and threats for their clients that have no basis.

 

[ultrarunner]

Pretty much my non legal advice to the sellers... just let it play out saying I would not waste my time responding.

 

[prichard]

Is there a realtor involved on either side? They would be covering this if do.

 

[ultrarunner]

There is at least one... unclear if the buyer's have a Realtor... I know the seller has one with 30 years in the business.

My understanding is the buyer(s) is/are part of an investor group with one of the principals being a realtor...

Great question.

 

[mjw357]

The property is being sold As-Is and was listed as such and seller made no representations other than clear title.

What else do you need when buying real estate? If you are a buyer and you want title insurance, it's on the buyer do whatever research you need feel necessary to get that insurance. If you want to buy it without, that's your choice.

If they are out of contract, tell the other party they are not interested in dealing with them any further and wait for other offers.

Sounds like perhaps the property was in the county in earlier part of 20th century (when the home was built), then annexed into the city later explaining the lack of record at the city?

 

[arkydog]

most lawyers i have found out are full of hot air. they only know the issues their clients tell them and make up some reason to sue you. you don't need a lawyer if you just respond back within the time limit. just answer their questions truthfully like you know what you are doing which every one does. i have dealt with many lawyers over the years and they only think of them selves in the end. realistate agents only work for the ones that hire them.

 

[ultrarunner]

Property has always been city... it is just the city has lousy records before WWII.

I used the term Title Company as a catch all... it is also the Escrow Company holding the deposit funds.

You are correct... they were out of contract more than two weeks ago and the seller/agent instructed escrow to release the funds...

I would venture the buyers don't have a leg to stand on... doesn't mean their actions are not causing sleepless nights for the sellers... it could even be the foreign buyers are not familiar with the process.

As to court... who knows what happens these days... still requires an appearance.

Years ago I was in Escrow to buy a home and during that time the seller and wife split up... no one showed up at the closing... my lawyer asked me if I still wanted the 100,000 property if I had to spend 10k in legal fees to force the sale... I passed because I had other irons in the fire... did get back my earnest money but was out about $1,000 in legal and inspection fees.