Fraud by Buyer, please help!

What is the name of your state?

Texas.

Hi everyone, I will try to be as breif as possible, but I would like to know what your opinions are on the courses of action(s) I should take with this.

I had a home I was willing to owner finance, to help a woman and her child out. We settled on a price, and filled out the TREC form for a unimproved property sale. ([url]www.trec.gov[/url])

She then wrote me a check for $4,000 down payment and did not tell me of any stipulations regarding the money. I waited about a week and deposited it into my bank account. (I am new to the process, I am aware now that I should have taken it to her bank.)

Anyhow, I payed some bills as normal and all was fine until a few days later my bank told me that the check bounced and now I have a negative amount in my bank account.

I called her with this information and she then said "Oh yes, I never deposited the money to cover it." I said "So you knew the check would've bounced??" (in dismay) and she confirmed that she did.

Well needless to say I wanted a cashier's check or money order now. She said she would pay me. She came by, drug it out, said she would have the money by the evening and yet never called me or spoke with me. She avoided my calls for 3 days, and finally picked up the phone and said she had problems with her boyfriend, etc. I called her around 20 times. I know she was avoiding me. Anyhow, the home is under contract signed by her and my two questions are this:

I consider this a breach of contract. We have specifically in the area where you may hand-write stipulations in "Buyer agrees to pay down payment and following mortgage payments. If these payments should prove to be unattainable, the contract shall be considered breached and none of the funds paid will be refundable."

I also consider this to be a text-book definition of fraud. She knowingly wrote me a check with insufficient funds. She knew that it would bounce! I couldn't beleive it.

To finalize, I now have a negative of about 1,300 dollars in my checking account because of this, and she is dodging my phone calls.

What should I do? Should I file a police report? I don't want to contact a lawyer for 1,300 in damages, or to collect 4,000 as I would never see it after the fees. How do I collect? Can I send her to jail for Fraud?

Please help.

[HomeGuru]

Originally posted by Nahirean
What is the name of your state?

Texas.

Hi everyone, I will try to be as breif as possible, but I would like to know what your opinions are on the courses of action(s) I should take with this.

I had a home I was willing to owner finance, to help a woman and her child out. We settled on a price, and filled out the TREC form for a unimproved property sale. ([url]www.trec.gov[/url])

She then wrote me a check for $4,000 down payment and did not tell me of any stipulations regarding the money. I waited about a week and deposited it into my bank account. (I am new to the process, I am aware now that I should have taken it to her bank.)

Anyhow, I payed some bills as normal and all was fine until a few days later my bank told me that the check bounced and now I have a negative amount in my bank account.

I called her with this information and she then said "Oh yes, I never deposited the money to cover it." I said "So you knew the check would've bounced??" (in dismay) and she confirmed that she did.

Well needless to say I wanted a cashier's check or money order now. She said she would pay me. She came by, drug it out, said she would have the money by the evening and yet never called me or spoke with me. She avoided my calls for 3 days, and finally picked up the phone and said she had problems with her boyfriend, etc. I called her around 20 times. I know she was avoiding me. Anyhow, the home is under contract signed by her and my two questions are this:

I consider this a breach of contract. We have specifically in the area where you may hand-write stipulations in "Buyer agrees to pay down payment and following mortgage payments. If these payments should prove to be unattainable, the contract shall be considered breached and none of the funds paid will be refundable."

I also consider this to be a text-book definition of fraud. She knowingly wrote me a check with insufficient funds. She knew that it would bounce! I couldn't beleive it.

To finalize, I now have a negative of about 1,300 dollars in my checking account because of this, and she is dodging my phone calls.

What should I do? Should I file a police report? I don't want to contact a lawyer for 1,300 in damages, or to collect 4,000 as I would never see it after the fees. How do I collect? Can I send her to jail for Fraud?

Please help.

**A: do you see what happens when you do not use a real esate agent and/or an attorney?

[nextwife]

Good grief. Earnest money is to bind the transaction until the closing. It is not intended to just use to pay bills. Had you done a title update, had you prepared a closing statement and completed prorations prior to using the money? Had you checked to make sure she had no judgements against her that would attach to the property upon her interest in title being recorded? Obtained applicable payoffs? Honestly, you had no business using the earnest money until a proper closing occured.

FYI- All the RE offices I know will NOT return earnest money (unless they still have the original undeposited check to return) UNTIL the check clears. Bounced Earnest money checks is a well known scam. Someone will try writing offers they know will not get accepted and hope the RE compnay deposits their worthless earnest money check. And that when the counter offers fail over several days, the RE office(s) will cut a check to return the earnest money, not knowing the check was no good. Most are pretty savey to that and make them wait for check clearance.

While I am grateful for any and all responses, what's done is done, and my question is what recourse do I now have? Perhaps things weren't done in the correct order, and to respond I did have the closing prepared. All I needed from her was a date.

Regardless of if I was supposed to use the earnest money or not, in the contract it states that it's not refundable.

Am I wrong in beleiving that she commited fraud?

Am I wrong in beleiving the she breached our contract?

I'd have to say that this has been the most uninformative experiences that I can compare to. All you people have done is insult me and have yet to provide any ANSWERS to my issues. I will not return to this forum, and I will take it upon myself to dissuade anyone from coming here. All they will get is generic insults from Forum maggots who in reality know nothing rather than "This is why you should go through a realtor."

Freeadvice.com should be renamed to freeinsults.com, or perhaps freepopusjackasses.com.

[HomeGuru]

Originally posted by Nahirean
I'd have to say that this has been the most uninformative experiences that I can compare to. All you people have done is insult me and have yet to provide any ANSWERS to my issues. I will not return to this forum, and I will take it upon myself to dissuade anyone from coming here. All they will get is generic insults from Forum maggots who in reality know nothing rather than "This is why you should go through a realtor."

Freeadvice.com should be renamed to freeinsults.com, or perhaps freepopusjackasses.com.

**A: this is too funny. Look at your checking account balance and tell us who the real jackass is.

[nextwife]

Sir, yes it is a breach of contract. However, you have no earnest money in hand to use toward liquidated damages. Yes, you CAN take legal action against them, however, they may or may not have ever REALLY had the actual downpayment funds. Thus, you may never actually be able to recover any money if you prevail. If suing for specific performance, you will be tying up the property and unable to sell it.

So, your best bet is to consider it a learning experience, and to seek professional and legal advice and services if entering into a business transaction in a type of business that you are not knowledgable about. The cost of pursuing legal action likely is not counterbalanced by the likely benefit. You are better off just getting back on the market and locating a ready, willing and qualified buyer, and having a legal professional guide you through the process. Selling real property is nothing like selling personal property. And use a third party escrow to hold earnest money!

The column is of help not only for current posts, but for those reviewing the archives. Thus information about how earnest money should best be handled may be of help to many who are researching the process prior to proceeding, while too late to fix your situation.

The best legal advice in any home sale is to use professional advice prior to proceeding. It's easier to fix at the front end (before closing) than the back, after locked into the situation..

[HomeGuru]

Do a search on this website using search word fsbo and for sale by owner.