Rental Property Investor · Oakland County · Member since 2018 · 151 posts · 97 votes
I'm going to start sourcing my own leads and making cash offers on houses, but I have a knowledge gap that I'm looking to fill. What kind of deal-halting complications can arise when a deal has legal issues? I'm thinking specifically of divorces and inherited properties. When a couple is getting divorced, is the transaction of a sale any different than if the couple were happily married? When a parent passes away and their children are trying to get rid of the house, who has the final say in actually selling the house? What kind of paperwork is needed to make sure the sale is legitimate?
Please feel free to chime in if there's another situation worth noting.
Flipper/Rehabber · Westfield, NJ · Member since 2018 · 111 posts · 84 votes
7y
My pleasure. I hope it is helpful, but none of it should deter you from going after those deals, esp if they are off market. All those things can be worked out! @Kyle Shankin
Flipper/Rehabber · Westfield, NJ · Member since 2018 · 111 posts · 84 votes
7y
@Kyle Shankin In any non-standard transactio I personally would suggest that you should use an attorney. My advice here is generally speaking for both scenarios. There are always other things that could come up. In divorce you need to be certain as to who has tittle to the home. Are they both still on it therefore needing both to sign the contract, has it been deeded over to one spouse? Does that spouse have to share in proceeds of the sale with the other? Does one of them have a lien the other doesn’t know about? You will still do your typical title search etc but sometimes one spouse can try to get over on another by agreeing to a deal with u without consent of the other. In an inherited estate an executor is named. That person is named in the will and then affirmed in probate. They handle the settlement of the estate based upon the deceased’s wishes if they had a will. That can get tricky too so again you should have an attorney looking over all the paperwork to make sure it was done properly.
@Kyle Shankin In any non-standard transactio I personally would suggest that you should use an attorney. My advice here is generally speaking for both scenarios. There are always other things that could come up. In divorce you need to be certain as to who has tittle to the home. Are they both still on it therefore needing both to sign the contract, has it been deeded over to one spouse? Does that spouse have to share in proceeds of the sale with the other? Does one of them have a lien the other doesn’t know about? You will still do your typical title search etc but sometimes one spouse can try to get over on another by agreeing to a deal with u without consent of the other. In an inherited estate an executor is named. That person is named in the will and then affirmed in probate. They handle the settlement of the estate based upon the deceased’s wishes if they had a will. That can get tricky too so again you should have an attorney looking over all the paperwork to make sure it was done properly.
Thanks Tahra, that makes sense and sounds like is good advice to make sure the deal is protected. It does, however, add another step. Which now leaves me wondering how investors who promise things like "fast and easy, no hassle" closings follow through. Perhaps it's just part of doing business that a certain percentage of deals aren't going to be able to fit that mold.
I take it a lawyer who specializes in real estate transactions is best to go through for this type of due diligence?
Flipper/Rehabber · Westfield, NJ · Member since 2018 · 111 posts · 84 votes
7y
@Kyle Shankin On those types of deals everyone has to use lawyers so the seller’s lawyer knows the process. Any delays are typically on the seller’s side because they have to clean that up before anyone will buy, whether it’s a cash deal or not. If everything is in order it shouldn’t add any additional time to what YOU need to do to close. It’s all part of the process.
Flipper/Rehabber · Westfield, NJ · Member since 2018 · 111 posts · 84 votes
7y
My pleasure. I hope it is helpful, but none of it should deter you from going after those deals, esp if they are off market. All those things can be worked out! @Kyle Shankin
One thing you need to remember is that real estate is always local. What is so common that "everyone knows" in one area of the country is unheard of in another. Tahra is from NJ, and I believe that it is quite common in the eastern US for everyone to have lawyers present at closing.
I have purchased houses with the exact complications you describe, and others. The title company took care of everything, and it usually doesn't take too long. We usually close in 2 weeks or less, even when there are issues.
The longest any purchase took to close was 3 months. We bought a house that was built as a parsonage from a church that no longer needed it. In 1960 a church member owned the whole block across the street from the church. They donated a part of the land and a house was built. It never changed hands until 2016, when we bought it. The title officer called us up and said she couldn't make sense of the property description. Errors had been made on the original deed. So the church had to have a survey done, and multiple (correct!) deeds signed, some by people out of state, before they could close with us. Fortunately, we had no problems with the delay.
Find yourself a good title company that doesn't cut corners and you don't need to worry.
Rental Property Investor · Oakland County · Member since 2018 · 151 posts · 97 votes
7y
Thank you @Sylvia B. That is also very insightful and I LOVE your story about the church, what an odd situation!!
Your point about local knowledge is well received and I'm glad you brought it up. I believe that all advice should be taken with the proverbial grain of salt, and it's the recipients job to apply the advice in a context that best fits their situation. I asked this question because I wanted to see what experiences other BP members have been through. However, I also asked the same question to my cousin, who works at a title agency local to me 🙂.
In any case, thanks again. I appreciate your insight and experience 😁.