How can I save this deal????

Question

Hello everyone. So... I have this property under contract that is a pretty decent rental, and I assigned the contract to another buyer for a wholesale fee of 18k. The buyer's earnest money is in and the closing is in 9 days. Everything great right? Well, I thought so, until I get a call from the title company saying that there is an issue with the title. Apparently there is some overlapping in the property description with the property behind it, which may prevent the title company to provide title insurance. The overlap is just on 20 feet of wooded land on the very back of the parcel and really doesn't affect the property in any way since the house is on the opposite end of the parcel, but apparently this can ruin the entire deal.

The title company is still looking into it and I should hear back from them on Monday, but I'm trying to be proactive and find out what can I do to possibly save this deal in case things go south.

Any ideas???

The title company is still looking into it and I should hear back from them on Monday, but I'm trying to be proactive and find out what can I do to possibly save this deal in case things go south.

Any ideas???

James C. · Answer

Mark,

First things first. What does your contract say about the transfer of title. That is the first place to start. If it doesn't address the issue (it should ) then I would spend a few bucks to consult an attorney. Does your seller have title insurance?  The overlap may be exempted, but it's worth looking at.

Now some ideas:

You could extend out the time for specific performance (extend the closing until the whole mess is figured out ).

If no one cares about the land, and it doesn't matter for the building, create a subdivision where the building and the land are on one deed, the questionable land on the other. Warranty Deed and title insure the building and associated land, quitclaim the other.

If the buyer wants insurable title on the "bad" piece then hold the "bad" parcel until the title can be straightened out. That will raise the question of who will pay for the title work and surveys. You will need to deal with that issue, which may require an attorney to do the contracts,  but better safe than sorry on this one.

Good luck,

Jim

Mark Matos · Answer

As it turned out, the title company was able to underwrite and insure the deed, so the deal is goi g through!!!