Hey guys I would love if someone could please help me. I've decided to jump right into real estate wholesaling and I've found a property to put under contract. The seller explained that there are liens and that he was willing to let it go for the amount to cover the liens.
I was able to confirm the liens due with the county so I sent the seller the contract with the amount.
Before he is willing to sign it the seller told me that his attorney advised that I call him. I called his attorney and he explained to me the lien amount (which I already knew) and that there was a possible mortgage issue from the 1970's that could be proven with documents from the seller or it not he could *override* it. i can't remember the exact term but the context makes me believe that what it is. i didn't want to sound like a newbie since it was the seller's attorney ;/
He offered to do the transaction for me
but my only issue is that my contract states that I would be given a 14 day inspection period. I explained to him that I was considering someone else and that I'd get back to him to give him time
Because of the issues with the title does he have to do it? Or can I tell the seller he can sign the contract and the title company/buyer's attorney can work out the issues?
The attorney was kinda pushy. I told him about my 14 day inspection period and he said he imagined that the seller would want to close much sooner than that. I kinda don't want to work with someone who rushes like that.
I really appreciate the help in advance. I feel very confident and I refuse to let this be an obstacle that stops me
Also, I'm in Atlanta if that helps. Thanks!!!
I'm thinking you might need to do a Quiet Title. Sometimes this can be avoided if a title company can get Comfortable insuring the property without going through the whole process. My suggestion is that you close the property at a title company you are comfortable with. Make sure you get a Warranty Deed. If there is Quiet title action that needs to take place then the seller can either have his attorney handle that and send the appropriate documents to your title company or the seller can hire your title company to do this.
You should probably check with your title company to see if they offer the service of Quiet Title Action. If not then find another title company, when I need to do this I go to one of First American Title's branches that is familiar with the county that the property is located in. Did I mention that you want to make sure you get a Warranty Deed. That's pretty key. I hope this helps you get started. If you have any other specific questions feel free to let me know. Good Luck.
Any real estate attorney can help you close this and work out any title issues. There is no reason you are obligated to work with this particular lawyer. I would not advise working with someone that (i) already has a relationship with the seller, (ii) is pushy, and (iii) seems in a rush to just close the thing (and make his $$). This does not sound like someone that is interested in looking out for your interests as the buyer.
I don't do residential closing, but I can recommend someone if that would be helpful. Fee free to send me a message.
Seller's attorney is advancing the seller's interests and (unless Georgia has guidelines allowing dual representation in residential transactions) would be conflicted from representing you as buyer. Use someone who represents you and your interests and make sure any title issues are resolved prior to or concomitant with closing.
@Chris Ramos , @Andrew Bauer , @David Miller - While your advice is sound, I think you may have missed the subtle mention of wholesaling and the fact that he doesn't intend to close at all. He hopes to assign the contract during his inspection period.
@Mark Sloan - Correct me if I'm wrong. Maybe you have the cash on hand or hard money lined up and do intend to close. In which case, all of the above holds true and you obviously need to make sure you have free and clear title and an owner's title commitment* and policy.
However, if you are just hoping to assign this contract and bow out, I'd suggest not going there. Wholesaling is enough of a juggling act when the title is completely free and clear, and you may have a hard time finding a buyer quickly and assigning the contract when there are known title defects. The action to quiet title could delay things, your end buyer could get impatient and walk, and you could end up losing your deposit and simultaneously leave the seller in a bind.
That being said, your contract may specify who gets to select the closing agent / title company (for example, in Florida, whoever pays for the owner's title policy normally selects the closing agent, and this is often the seller).
Regardless of who closes the transaction, your contract should specify that you get free and clear title (implying all of the liens and encumbrances get paid out of the seller's proceeds at closing) and an owner's title policy (meaning if anything comes up later on that might cause a cloud in title, you are insured for up to the purchase price).
*Review your owner's title insurance commitment carefully. It will contain a page of "standard exclusions" which are probably fine (things like utility encroachments, future property taxes, etc). But it may also contain other, more specific exclusions (i.e. "We'll insure the title against everything except that unsatisfied mortgage recorded in 1970"). As a cash buyer, you could unwittingly sign off on that and take title, but you'd never be able to re-sell the property to a financed buyer with such an exclusion.
Even if the plan is to assign the deal, getting your own attorney who represents your interests would still be my recommendation.
Thanks guys! The attorney mentioned the issues weren't too big and should be easy to fix so I feel a bit confident about it being cleared. I've found a few buyers.
Is there a way to get a title search done for free? I read somewhere that you can ask them to take it out the final transaction. Just not sure how to go about doing that. Thanks!!!
@Mark Sloan It's always a great idea to take some action and in the meantime get education from action and right here from BP. Most everyone here is giving you sound advice. If you can get an Owner's Title Isurance Policy then you will be completely fine in this transaction, but more importantly the end buyer will be confident and it will be an easier closing. Also next time, at the beginning of the negotiations work out who is going to pay for these legal closing costs at the time of closing. If you are not officially going to close and own the property all of the costs can be passed to the person who closes on the property.
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