Is this purchase too risky?

Question

A property that has a $175,000 spread in profit, is being sold for cash only because there is a title issue. The property is encroaching on another lot that is not part of the title/deed. I can pay $300 to have a pre-title search to understand more about the issue and this is anticipated to take 10 days. Once we have the pre-title report, then I will understand what course of action I need to take to get the lot to be deeded to the property. The women from pre-title says depending on what the report says, I might have to file a lawsuit in court and come with sufficient evidence that this lot should be included with the property. All said and done 6 - 12 months before a resolution with the courts because of COVID-19 (this is a possibility not definite)

Y'all.............Should I pursue this? The cash (over $150K) is coming from a private lender who I have a great relationship with and can work a very good financing deal with. There will of course be legal fees/court fees in the thousands if I do in fact have to file a lawsuit. Remember we have no idea what the $300 pre-title report will say.

Does ANYONE have any experience with this and a recommended title company in the state of Maryland. Thanks for the support!

Rick Pozos · Answer

I would talk with the neighbor FIRST. If they are willing to work with you, great. If they are butt heads about it, you will not win no matter what you do.

For clarification, is the house on the other lot? or is it just a part of the fence?

Caleb Christopher · Answer

Yes, talk to the other property owner.

If you can get an agreement to either give, buy, annex , or rent the space (find SOMETHING), you're in good shape.

I would not want to lock up money in a potential court battle though.

Nkem Nwogbo · Answer

@Rick Pozos okay thanks for that. I’ll order the pre title search and see what the options are !

Nkem Nwogbo · Answer

I am purchasing a property which a few title processors have said is technically encroaching on a lot that it does not belong to. That's comforting to hear about the re-zoning though!

The house is an REO, not sure how negotiable I can be with the bank.

Darius Ogloza · Answer

Not 100% sure of the facts from your description - are you proposing to buy both lots, including the lot being encroached upon?  if so, I would think securing the legal right to unify the parcels should neither be expensive nor particularly problematic from a re-zoning perspective.  Can you structure the deal so that the purchase is contingent upon what you discover through the preliminary title report?

Is this purchase too risky?

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