Advice: Bank sold us one property, with two houses on it, already 2 parcels, but 1 address on the deed.

10 Replies

Has this happened to anyone else?

We bought a Freddie Mac foreclosure recently for under $50,000. We assumed we were buying 1 house on 1 lot. I didn't pay special attention to the warranty deed at the time of the purchase.  We are now selling the property for $75,000. Our agent double checked our special warranty deed, and noticed that in fact we purchased two parcels. Our agent took pictures of the second house, it needs little work, and should be worth over $100,000.

Our sales agreement is contingent on a survey, so we are about to send the surveyor out there to properly divide the property into two addresses, and we will sell the first one to the buyer, and proceed with repairs and sale on the second.

Buy 1 get 1 free. Never heard of it, thank you Freddie.

What should I be aware of, and what should I make sure to do in this situation?

Check your sales contract with your current buyer.  The legal description generally overrides the address, as identifying the subject property.  You may have just Sold 2 for 1.  Surveyors can't divide properties, they can simply find the established corners/lot lines.  Note, there is a difference between two "parcels" and two "lots comprising one parcel". Is there one tax ID/parcel number, or two?  I recently subdivided one "parcel" consisting of 9 platted 25' lots, with two houses on it, and One address identifying the parcel, into two "parcels".

I cannot view on a map what the deed covers. I have the parcel number and am waiting for the surveyor to provide a preliminary report/sketch and see if our agent is on the right track.

We haven't sold anything yet because the sale is awaiting our results and subsequent changes.

We own 2 parcels, but have 1 parcel ID # on the special warranty deed we received. And it includes only 1 address. 

Also be VERY careful to make sure the foreclosure case covers both LEGAL DESCRIPTIONS. If only one of them is on the foreclosure then your deed needs to be re executed to correct it. May want to have a title company look into it just to make sure you don't have a mess on your hands. Message me if you have any questions. Worked as a title agent for 10 years.

"We own 2 parcels, but have 1 parcel ID#".  Unless it's done differently there, each "parcel" has it's own "Parcel ID#". One parcel ID# equals owning one parcel.  Again, are we intermingling "parcel" and "lots"?  As I mentioned, I had one "parcel" which contained 9 "lots".  Certainly nothing wrong with getting two for one!!!  But, I'm surprised no one figured this out while it was available.

Would I need to get a new deed written up?

@Ben Bakhshi  

Ben, you can only get what the bank had a mortgage on, and foreclosed on.

Does the legal description reference lot and block numbers, or meets and bounds, etc.?  Are plat maps online?

Are your public records online?  If so, and if you want, PM me the particulars...if I have time I'd be curious to look at it.

@Wayne Brooks , The property in fact does have 2 parcels. But, for some reason the county is sending out a single tax bill. We need to send a survey with separating the property out for the county records. Of course, during the sale, we need to submit the appropriate survey results to be recorded to update the title.

It all hinges on the legal description, of the property mortgaged, foreclosed and resold.  Does the legal description in the mortgage and foreclosure include both parcels?

I can almost guarantee you that you have a mess. Hope you fixed the right house!

I've been through this 4 times, once with BoA, 2 were Fannie, 1 Freddie. All secondary market loans traced back to the wrong legal at origination.  No, the appraiser didn't know where he was. All on larger lots. BoA used the wrong legal for the owner who owned both adjoin lots, appraised and loaned on A, did title work on property B.

I suggest you get with the title company and search back prior to the loan secured for both properties.

That, or someone built a house on one description and later had a minor subdivision (or not). You need to read the legal if it's meets and bounds to see the area contained in the description prior to that loan and again after. If it's a Lot and Block description check prior from the original plat to see if lots were divided, you can see that usually at the Assessor's Office.

You won't be owning you neighbors house if someone bought it. If it's new and no sale the previous borrower will have some say if they had no knowledge of the screw up and can show reasonably they never intended to grant two houses on one loan program.

BoA tried that with two adjoining lots, didn't fly as the loan docs, note or program weren't for blanket loans, nice try... LOL

No, pretty sure you didn't get a two for one sale with a secondary market loan. Sorry... :)   

Might sell your house to the title company!   

Originally posted by @Wayne Brooks:

It all hinges on the legal description, of the property mortgaged, foreclosed and resold.  Does the legal description in the mortgage and foreclosure include both parcels?

 Yes.

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