Hey BP Family!
This is for all my fellow RE Investor Specialists & RE Investors...
I was working with a faithful and very diligent property investor here in South Jersey. They did thorough research on the property interests, including contacting the township to inquire about any vacancy fees, unpaid water bills and such. I, followed up and contacted the townships as well to confirm that there were no unpaid fees owed by the current owners. We were told NO on every single occasion. The sellers even denied owing any unpaid fees and balances. Long story short, we closed two properties 15 days apart in the same town, on the same street a few houses apart. After we made settlement on the second property, within 30 days my investors received a balance due notice from the township for a total of $1200!!! $600 was due on each property. As you can imagine, my investors are livid at this point. Let me go back a second, there was a $50 unpaid water bill that my investors were unwilling to pay so in order to save my deal, I reimbursed them myself. Fast forward, had they known about this $1200 debt they probably would've walked away.
Now, I did my due diligence. I met with my broker, the title company and even called the REC. The only response and resolve I received was this; those debts should have been forwarded to the sellers and your buyers will have to pursue them for reimbursement! What a crock! Is that legal for a township to "hide" debts they are certain the sellers won't pay and then bill the new owners?
My question is, has anyone ever had this problem? If so, how did you get it resolved?
What other issues have you run into as an agent for an investor or as an investor?
Oh... and I lost those investors! Although they acknowledged that the fault wasn't mine, I was charged with being guilty by association!
@Shannan Bowen Well first, your investors sound like short sighted jerks (I had a different term but it’s not suitable for here), threatening a deal for a $50 water bill. Finding the $600 charges would fall more under the title search people than on any agent.
As to the “hidden debt”, here the title companies do an additional “city lien search” which is letters to every department that could have an “unrecorded lien”. This cost an extra $200 and uncovers things like utilities, code violations, etc. I don’t know if your title companies/attorneys provide this. I couldn’t imagine trying to track all this down from the various departments in different areas, as an agent.
Curious though, what were the $600 fees for and are they somewhat common?
@Wayne Brooks LOL I will refrain from adding additional "compliments" as to my investors (Wink). The title company did a search but never have they mentioned a "city title lien" search and theur suggestion was to have my investors go after the pervious owners.
The hidden fees were VACANCY fees. It differs from township to township here in New Jersey.
Thank you for that information. I'll be sure to store that in my bank!
Boy do you have a shock coming to you when you face a real disaster if you think $600 is one.
@Russell Brazil lol the disaster wasn't really the $600 for me. The disaster for me was not being able to my clients reimbursed and losing my cash clients because of it! My commission off of each property was a few $k each. So in the long run, yea... it was a disaster to my business and as a newer agent at the time.
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