Clouded title, buyer options?

Question

What are the buyer's options at closing if the title company is unable to produce the closing documents because the seller has not been communicative and the title company has discovered numerous liens against the property but does not know enough information to provide title insurance or provide an accurate payout?

Don Konipol · Answer

Don’t know the circumstances here, but in general my experience when a seller was uncooperative with title company requests they didn’t want to sell for some reason; such as liens and judgements attached to the property that they didn’t think would have attached so they would not be receiving the cash out they had anticipated. In this case the seller is not going to sign a warranty deed as they don’t want to sell. In a case where a seller has lost interest and doesn’t want to go through the hassle of clearing title usually because they don’t anticipate much net proceeds, but is still willing to sell, you can have the, sign a quit claim deed. Then work the list of creditors, judgments, and liens clouding title, taking legal action to remove the ones lacking in legal merit, and trying to offer a “settlement” amount (discounted payoff) for the ones that are legit. This requires capital since you won’t be able to use the property as collateral for a loan until such time as the liens are paid off.

Chris Seveney · Answer

Agree with Don, sellers thought they had enough to cover the liens or pay off other bills and realizing they cannot anymore and are just going to walk away. What is their agent selling?

Jay Hinrichs · Answer

I find negotiating liens works best pre closing.. if you close then you lose leverage.

Caleb Brown · Answer

If there is liens and they can't be paid off at closing then you will have to cancel. No way around it. Title companies can close certain things but liens can't be outstanding at closing.

Russell Brazil · Answer

Your options are to buy the property with cash and assume all the liens, or not to buy the property.

Peter Walther · Answer

Has the buyer followed up with the seller or the seller's agent to find out how the seller intends on proceeding? It's really not the settlement agent's job to spend the time trying to get the seller to respond. The buyer needs to review the sales contract for remedies if the seller cannot or will not deliver the quality of title promised.

Clouded title, buyer options?

Clouded title, buyer options?

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