Long distance rental property purchase, can I trust the realtor?

Question

I found a property that I like, 2000 miles away, cash deal, I'm using the selling agent (century 21) for everything, Now it's time to send money to the escrow account, how can I protect my$elf, first rental, can't afford to lose.

Lynnette E. · Answer

You should not send the money until after you do the inspections and review the report in case something bad turns up on the inspection report.  You have a period of time in your contract to do this and back out.

Also you will have to send the amount of money the title agent says to send.  It won't be the selling price because there are closing costs--deed prep, mailing fees, title insurance, recording fees, taxes.  Some you will pay, some the seller may pay.  So title will tell you the amount.

It takes 4 weeks because that is what is in your contract.  It can be faster or slower, but your contract set the tome.

You can sign everything by mail to close.  BUT you should go in person, see the property, etc.   You may be buying a dump in the ghetto!  If your mother was selling the house, skip seeing it, otherwise, don't trust a stranger.

KB Collins · Answer

Can I trust the Realtor...  Well the answer to that is Yes! You can always trust everyone and anyone.  However, should you trust the Realtor or for that matter the Lawyer, the Doctor or the Cop on the Beat?  That all depends on what you are requiring from them and what info they are relaying to you.  If you ask the realtor what the date of the closing is, then maybe you can trust his answer.  If you ask the realtor what you should do for title insurance, maybe your reliance on that response may be riskier.

So since you are so far away to be able to validate the information, you are being given, you must ask yourself - who owes you a duty?  Does that Real Estate professional owe you a duty, either fiduciary or not...  Ask and answer that question and then you have to ask, can I rely on that answer?  If not, you need a validator (Maybe Your Own Realtor) for that info.

So in short, can you rely on someones answer, the answer is yes, should you?  That is a deeper question.  I say this because even our most trusted advisors are sometimes wrong or are misinformed or even worse - misguided or has an ulterior motivation.

Best of luck and my advice is Trust but Verify!

KB

Theresa Harris · Answer

Book a flight and go and look at the property yourself before the conditions are removed.  You should also have used your own agent.  Make sure you get the inspection and ideally be there for it so you can ask questions.

As for the 4 weeks, it takes time for paperwork including title searches, inspections and the person living there to find a place to move to.

David M. · Answer

@Williams T Alexis

First off, you really should have professional help, not just an open forum

You mentioned south NJ..  they don’t normally use attorneys there (don’t ask me why or how, in north NJ we normally use attorneys) so I guess we are okay here.  But, did you want an attorney?

Secondly, here is probably a reason to have your own Realtor be your buyer’s agent to guide you, especially being 2000 miles away.  That would have been one way to protect yourself.

You sent a check for the full asking price to the Title company?  You signed for this in your contract?  Is this part of the money you can’t lose?

4 weeks closing you ask?  Usually most buyers will do their due diligence on the property, even on cash deals.  Attorney review, inspections, and Title search come to mind.

Can I ask, what did you figure for closing costs?

Williams T Alexis · Answer

Thanks Lynette, I send a certified check for the asking price to the title company, (no financing), contract signed by both parties, closing date in 4 weeks. Do I have to be there? why 4 weeks for the closing?

Lynnette E. · Answer

Don't wire the money, send a check by overnight mail.  Send it early enough for it to clear before escrow is complete, and with a little extra $ incase something comes up.  They will send you a check back for any surplus money.

Or, when you get the wiring instructions, call the number you already have and know is real for the escrow company and have them verify the instructions and account numbers.

Russell Brazil · Answer

1st rental, cant afford to lose....then dont buy a property 2000 miles away.

Lien Vuong · Answer

You should a representing attorney that would facilitate that for you.

Williams T Alexis · Answer

Ok, I understand about the possibility of emails hacked, but what about the title company or the seller agent?  I check them out, both are in business for the past 20 years in South Jersey, what else can I do?

Soh Tanaka · Answer

One of the many things you need to do is to call whoever (NOT the seller. Maybe a title company. I don't know how you do in the state you are buying) in charge to receive the money directly and ask for the transfer information (wire instruction, etc.) Emails can be hacked. It happens a lot.