A few weeks ago I wrote about my frustration trying to track down a seller so my client could pay cash for 
her property. It actually took THREE WEEKS, but finally we were under contract. Geesh! I was astonished that someone with a property listed for sale would be so hard to contact.
My buyer, a young guy with big plans, as well as CASH, was pressed for time. But we persevered. We needed a quick close so he could get on with his business, which involved this purchase. Now comes the news from our fabulous escrow officer, Heidi Simon at Pioneer Title, that the seller doesn't actually have clear title. Let's see if I can follow this. Ms. Seller has a quit claim deed from her mom, who received the property from her step-dad after he died, except that there is no record of it being deeded to mom. Then there is something about probate being settled in another state, but the property is in Idaho and probate will need to be settled here. Just need that lawyer to contact this lawyer to start the ball rolling. Or something like that.
Oh yes, the seller would like to know if my buyer is willing to chip in to help cover the legal fees to settle probate. Could be done in a couple weeks. Or not. I'm guessing not. ARE YOU KIDDING ME? By the time probate is settled, my buyer and his CASH will have skipped on down the road to another property, with a seller that can be timely reached, and who actually owns the property that is listed for sale.
So just a reminder to all of you home sellers and listing agents out there, please be sure that you have a clear title before you start marketing your property. It's IMPORTANT!
Janna Rankin Scharf provides a superior level of real estate services to home buyers and sellers in Coeur d'Alene and Kootenai County, Idaho. Visit www.JannaScharf.com to search for homes in the Coeur d'Alene MLS for anywhere in spectacular North Idaho.
No matter how grand or modest your real estate dreams may be, you can turn to me in confidence. Give me a call today and let me know what I can do to be of service to you!
Janna Rankin Scharf, AB, GRI, CSP, CNS, CLHMS 208.651.9700 NorthIdahoJanna@gmail.com
Janna Rankin Scharf provides a superior level of real estate services to home buyers and sellers in Coeur d'Alene and Kootenai County, Idaho. Visit www.JannaScharf.com to search for homes in the Coeur d'Alene MLS for anywhere in spectacular North Idaho.
No matter how grand or modest your real estate dreams may be, you can turn to me in confidence. Give me a call today and let me know what I can do to be of service to you!
Janna Rankin Scharf AB, GRI, CSP, CNS, CLHMS 208.651.9700
Just goes to show you don't have any idea what you are going to run up against in today's market.
Janna - a veteran Realtor, when I first joined the business, told me a story about listing a condo, having open houses, broker's tours... and finally getting an offer, and negotiating it.
As they put the paperwork together and pulled title, they noticed something odd. Her clients were not the owners of the property. They were tenants. What were they thinking? That somehow at the closing, everyone would overlook this tidbit and hand them some cash?
Peoples is stoopid.
Fact is, a property doesn't have to be recorded in the land records to be a legal transfer.
Of course, there is that little fact that the person selling must be the real owner.
OMIGOD... that happened to me... and the agent had the listing for 1200 days and never discovered it... Don't get me started... My buyers are over the top with anxiety... I don't know... I think 1200 days is plenty of time to do your due diligence? don't you?
If there is a big problem to solve, maybe there will be a big reward at the end! We work a lot with investors and fix & flip properties also. We constantly run into problems like this. The bigger the problem the bigger the paycheck.
One of the messiest situations we ran into, was a property posted for tax foreclosure. We finally got a hold of the guy about a week prior to closing. Turned out that the last time the deed had been transferred was in 1946. Ever since the family just had given the house to whoever lived there without probate or any transfer of title. The guy we talked to had 14 siblings... imagine how many people we would have had to get all together to agree on the sale.
This deal we walked away from. The owner wanted too much for us to try to work it out....
So maybe, if your client can get an excellent deal it might be worth the wait.
Iliane
I agree a property has to not only be on the market, but ready to sell. Some people don't understand this.
Janna,
That sounds like a tough one. You're buyer is lucky you got after to find out what the real story behind it was. That's why a buyer's agent is worth having!
Yeah, I had something like that well several years ago. I did everything to get it closed but it never did. Won't go into the details, it was gruesome.
Even worse is an "owner" wanting to sell a home that isn't his! In that case, there were little clues that something was amiss.
this is why we do the research! Get to the town hall pull the paperwork! Then keep digging.....
I hope you moved on to the next property. It is always a good idea to open title when you get the listing. It just makes sense.
My Dad and I have a bank owned property (Fannie Mae) and they always select their own title companies, usually in Las Vegas, to our chagrin because it makes it a little harder to deal with. Well, needless to say, the escrow has been dragging out for over 75 days because the deed in lieu of foreclosure signed by the owner was never recorded and was buried in some attorney's file in Missouri...
We managed to track the attorney down (and he was waiting to be paid) but it just goes to show, even BIG SISTER Fannie Mae isn't exempt from these issues.
Unbelievable. Help with the legal fees? This was a listed home? LOL!!
Oh my.. this is horrible.. I agree with you on this one.. NEXT !
I can see that happening once in awhile but I try to check out the names of people who are on the title before I even consider a listing. I need to know or else I won't show lol
Great post. Aloha, Lana
Oh I learned a lesson recently. The will seemed pretty clear cut. Wrong! Rural development loan requires title insurance....noone will write it without probating the will. A month at least.
Janna...
I read our GAR contracts very closely and to my surprise, the seller only warrants that title can be delivered at closing, and not that the seller has title at the time the contract is signed.
That has always struck me as very strange!
Janna,
I would move on...what a shame that the listing agent didn't do their research. Interesting post.
Janna: A little due diligence goes a long way. One more example of how our time can be wasted if we are not careful.
Janna - I think we've just about seen it all when it comes to bazaar real estate scenarios these past two years. Are we ready to return to a more traditional market or what:-)
It is surprising that a professional would have listed a property without clear chain of title.
Love hearing the stories from the 2009 Real Estate market... thanks, Janna...
Isn't it great to have the title company to help sort through this. I guess the seller didn't know the intricacies???
Hi Janna, I would agree with you-- IT's Important!! The old title examiner in me wants to know-- what happened!! ??? The agent in me says, well, lets work through this and get it closed!! I'm sorry this happened to you and your buyer! The Active-Rainer in me says "CONGRATS on the FEATURE!!
Janna, that is too crazy! It seems like every day I hear about or experience some new and wild twist to this rollercoaster market.
I ran into something similar recently. The listing actually stated the owner's name, but that the bank was selling the property. We had to run a title search and found out that the foreclosure sale had never even been held, so it wasn't even a bank-owned property yet. Cash deals require an extra step of diligence by the buyer agent because you can't get that money back except through litigation. If the buyer is getting a mortgage, the title company will pick up the problem and deny the mortgage, so your buyer can get out of the deal due to the mortgage contingency. With REO's there is a lot of sloppy work by listing agents as they are dealing in such volume. That's just one more good reason why buyers need to work with a buyer's agent and not go direct to the REO listing agent.
We had a similar situation once and the seller actually got the paperwork done and a clear title for the property in time to close the transaction for our buyer. Yea!!! It can happen but there were tense moments!
Mary
Janna, The stories go on and on and on. My husband recently received an offer on his Mom's home where the buyer was getting a hefty down payment from her "boyfriend's Mom's inheritance" but he was not part of the contract and the other agent could not understand why we were "concerned" and would not accept the offer.
Janna, not good. We do have to do our homework all the way around. Such nightmares out there. I am thinking that perhaps in the case of cash especially, a contingency clause needs to be added for clear title.
Congrats on the gold star!
Janna, it goes without saying that we need to list a home with the proper documentation and know that the seller is the person who is signing the listing agreement! Good luck on getting this one to close!
Janna:
Congrats on the Featured! I am also glad to be in your downline. I learn so much here and love it more daily. We miss you in colorado. I love properties like this. I have done 2 probate deals in the last year. If you have the right lawyer it can go pretty fast but keep the dream going and get that cash young gun under contract on something with clean title.
Yet another good reason to buy "title insurance."
Some people will try anything for $
Patricia Aulson/Portsmouth NH Real Estate
Very interesting! Years ago I was working with a client that needed a refinance on one of his properties. During the process we learned that he didn't own the property, but a family member did. Obviously that ended our involvement.
I have so been there and done that and have the shirt to prove it...or lost my shirt! LOL! I am a Texas REALTOR and I have done what I lovingly refer to as the Texas Title Trifecta of real estate...Divorce, Death and Doublewide all in one transaction...got it closed, but it took forever! :o)))
OH MY GOSH everyone. What a riot! I have had so much fun reading all your comments, and then to top it off with the comment above, the Texas Title Trifecta of real estate... Divorce, Death and Doublewide all in one transaction! I am literally ROFLMHO!
When I wrote this little post, in a moment of frustration, I would never have thought it was Feature worthy. In fact, I was playing around and decided to see if simply adding a photo to my post would bump it up to 225 from the expected 200 points. Isn't that, after all, one of the big Active Rain mysteries? So, I popped in a photo of.... a PRAIRIE DOG! Makes perfect sense.
Now, I am more confused than ever about what the AR gods deem feature worthy (but THANK YOU for the gold star!) I HAVE solved the 200 vs. 225 point mystery. That irrelevant prairie dog photo did bump my posting points to 225.
It is such an honor to be associated with such amazing, and FUN people here in the Rain!
Thank God for title search. What a mess without it.
Whos on first and whats on second. But who is on third? No, Who is on first and I don't know is on third. What do you mean you don't know? What you have there is a failure to communicate, and it's not your fault but it sure became your problem. My sympathies are with you. And my apology to Abbot and Costello.
Janna, great advice and of course one issue I do the best to help my customers with. Congratulations on the featured post! A gold star for you.
Good Job Pioneer Title! I have to give them credit since my wife works for them in the Boise office as a Senior Title officer. They are being great to her so I had to sieze the opportunity to say Kudo's to them.
And people say you don't need a Realtor or Title Insurance . . . bah humbug!
We've got a smiliar situation going on now. The good news we are solving it up front rather than putting it on market and then having it go into the spin cycle. And.....my title gal is fantastic at working thru this more complicated issues. What would we do without our trusted partners?
Say it ain't so Janna. It is amazing what some people do not understand. Oh and thanks for the info on the photo points.
AR is great to encourage activities that are helpful to us.
Richard
Wow!! What a great post! Unbelievable the things that people do and/or ask others to do.
Title search...title search...This is definitely a nightmare. Enjoyed reading all the comments on this post.
We sold a house and when the title search was done it revealed that one of the owner's was a minor. The minor could have been appointed a representative, which would have taken longer than our buyer had, so we moved on to another house. Since then, when we list a house, we pull the title.
Preparation and planning should occur when the listing began. An experienced listing agent would have known to have planned better if the right questions were asked when the listing was procured, not after a contract is signed ! Unfortunately, this happens much too often. Would be interested to know how it turns out. Did the seller have her own agent ? Sounds whacky that you had to track the seller down. Was she a FSBO ?
Its amazing what you will run into out there. It doesnt sound like they are real serious about selling.