Hello, the quick situation I am facing…I spent a few months going thru the process of wholesaling a property…all set, got it wholesaled, and as the last step my buyer ordered the title search. It came back with large government leins against one of the three heirs of this estate. My attorney cannot release the assignment fee to me until the title is clear and marketable, rightly so. My buyer is upset that he now has to wait for this to be cleared up. The seller’s attorney is working to clear it up with the govt so my buyer can get title ins and the sale can go thru.
Anyone know how long this may take? Anything I can do to help move the process along?
Title issues can drag out for months, depending on the issue. I’ve seen deals completely fall apart after waiting 4 months. One of my closing this week is delayed because there’s an heir who refuses to sign a release. The bank was trying a short sale, so they’re just going to foreclose if the heir does not want to sign. My buyer is negotiating for first right of refusal.
Since this is a government lein, it could be a tricky situation. Your lawyer would know better of how you can help handle it since they’re the ones with all of the details.
In states that I do most of my business in, Foreclosure is a iron clad way of cleaning almost any title.
Not knowing the specific about your deal, I would ponder if there is some way to control the property through a foreclosure process to “rid” the lein.
Its an aggressive, and ballsy way to go about it, and take some capital, but if the deal is good it may be an option. Pose the question to your legal rep if its interesting enough to you.
So guess what, my buyer is stuck in a deal with a property that has a title issue. The seller was doing a short sale and they found an heir on the title. They’re said they were going to foreclose, but now the seller’s agent said the bank didn’t and she’s trying to give her trip to Hawaii to the heir.
December has brought some strange cases.
This may be a good eye opener to pull a title search prior to wholesaling. If you can find a relationship with a local title company (or better yet a search company directly) you should be able to have a search pulled for $30-$50.
When I wholesale a deal, I present the buyer with the following:
–Written adjusted comparable value - prepared by a local appraiser ($50)
–Title report ($30)
–Written estimate for repairs (free from contractors who want the business)
– then obviously the original contract and the assignment.
I collect the assignment fee at the time of signature and hardly ever run into downstream issues.
One issue I have run into lately is that a couple deals have taken 30+ days to find a buyer (my list is a little weak and I have been busy with full time job). I actually lost one of these deals to the seller completing a sale with someone else even though he was under contract to me…I have now begun getting the contract notarized and record it against the property ($15) after consumation. This will prevent another buyer from transferring title.
I agree, Dave.
In our case, we’re the buyers. The title issue came up last week. The bank was doing a short sale. They said they were going to foreclose, but then it will go to auction and the heir may have the right to pay off the loan.
I think we’re out of options unless we do a subject-to with the heir. I’ll try to find her contact info and see if we can work with them directly. So far, they don’t want to sell the house, so that throws a glitch in our plans. The Texas Legal Hotline that REALTORS get said there’s not much we can do except sue the seller, but he has no money.
If, however, you find the right title company, they won’t charge you for the title search if a deal falls through. I immediately fax a copy of my contract to the title company for them to start their title work. If I have to back out of a deal, they don’t charge me for the search. They view it as a cost of doing business. Think of it like this. When you have sold a personal house in the past, have you had somebody back out before? When they did, did the tc charge you for a search that they started? I have even had the title company run for me a search on a property I was trying to hunt down the owner on and they didn’t charge me. That one would be a hard trick to pull off without having a good relationship with them.
Brandon Lambert
It is possible to get them to release the lien on the property and attach it to the individual instead, and it’s worth trying!
I believe that is exactly what is happening. Each of the heirs has signed everything and agreed…now it’s in the hands of the lein holders.
Thanks for all the input!