Re: Owner finace gone bad real bad Mike WA chime in

Posted by Mike (WA) on October 05, 2011 at 15:48:20 from (69.10.196.29):

In Reply to: Owner finace gone bad real bad Mike WA chime in posted by jocco on October 05, 2011 at 14:50:06:

We had some scammers like that around here about 30 years ago. Came into town, rented office space, put out the word that they were buying timber land. "Lewis County Land and Timber"- sounded like a legitimate player (timber is big, in this county).

They were paying good prices for timber land, and attracted lots of interest. They would make an offer with $500 cash earnest money, invite seller to have seller or his own attorney draw up the papers. When papers were done, they would look to see if there was a "timber clause"-that is, a clause saying buyer can't log until he owns the property. If there was, they would back out ("our investor backed out, so sorry"), and seller would retain the earnest money. Nothing to arouse suspicion there- who would walk away from $500 if they weren't legit? But if there was no timber clause, they would go through with the purchase, and quietly start making monthly payments.

They did this until they had a dozen or so properties under contract- took probably a year. Then, overnight, they moved loggers into all the properties and started logging. Perfectly legal- payments are current, "timber is mature and we need to log so we can replant and get the timber into a rotation for future harvest. Don't worry about a thing. We're in this for the long haul."

You can guess the rest. . . of the story. As soon as they had logged everything, to the tune of a couple of million bucks, they decided that the property was "surplus to our needs", and big-hearted guys that they were, executed a deed back so seller wouldn't have to foreclose. "We're sorry for the inconvenience, and you are free to keep the payments already made." Even sent money for the recording fee, if I remember correctly.

And like the situation you described, it was all perfectly legal. Nobody could lay a glove on 'em. They knew just how far they could push it- by having seller do the papers, they avoided any arguments about disparity of knowledge or bargaining position between buyer and seller. What actually happened is that they would give seller a standard form Real Estate Contract when they made their offer, which didn't mention timber; seller, wanting to avoid paying attorney a couple hundred bucks, just filled out the standard form contract, and they were off to the races.

Your seller may be able to do something through the Consumer Protection Act- but barring that, you're probably right- can only foreclose.

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