What should I do???

Question

Had a seller call in that sold the property but it is still in his name and behind on taxes. He can't get in touch with the person that bought it and doesn't want to take that hit on his credit. Should I just go ahead and put it under contract?

Rick H. · Answer

I tried to follow this thread however it seems to be economical with the facts.

Former owner calls wholesaler, @Reggie Youngblood, concerned that their former property is going to sale for defaulted property taxes. They are also concerned about their credit due to property being sold subject-to their old mortgage.

Additionally, former owner accepted a purchase money note but that has been paid and satisfied.  No record of transfer can be found such as a recorded deed (to date) and it is believed that new "owner" may reside in the subject property but does not respond to former owner's attempts to contact.

Is this about right?  Geez, my nose is telling me that there's not much upside but a lot of downside to working with this former owner.  As a wholesaler, I would think it essential to be clear on the facts since you would be making only a modest profit margin and can't take a big hit from lawsuits due to tortuous interference, etc.

Account Closed · Answer

Ned:  I love these kinds of deals too. But as Eric Belgau pointed out above it's the OPs job to know more about the problem than the other players do. Not sure that is the case here.  You gotta know title, and deeds, and contract sales, and in this case the tax sale situation before you can go inserting yourself between two parties who already had an agreement.

For all we know, the seller doesn't understand or know that he has to deed the property to the contract buyer now that the loan is paid off.  The OP says that the seller has been asking for the buyer to put it in his name, but how is he supposed to do that exactly.  Where is that deed? :) For all we know the buyer has a deed he hasn't recorded and doesn't know it's going to tax sale.  Perhaps the buyer is deceased.  Who knows?

That being said, if this deal was in front of me, I'd be knocking on the door of that house today and trying to figure out what was going on.

Chris K. · Answer

I wouldn't touch it unless you know for sure what's going on with it. How do you know there isn't some clerical error that they're currently working out?? You don't want to tie yourself up into it, then tie up another buyer into it just to have the original purchaser come out of the woodworks.

I'm kind of curious how it's even possible that this happened?

Eric Belgau · Answer

I don't think it's a good idea to get involved in another person's mess unless:

A) You know what the mess is, and

B) You know how to fix it.

If both of those are true, then you can probably make money fixing the mess.  If either of those is false, then you should probably walk.

Reggie Youngblood · Answer

The owner told me that he "carried the note and the buyer paid it  off".  The property is occupied by the buyer, but no one can get in  contact with him.   I know its a deal in here somewhere, just need to figure out the steps to clear the confusion.

Rick H. · Answer

Thanks for the kudos @John Klaus and @Wayne Brooks.  Wasn't even trying to be funny as much as I was frustrated with thread.

@K. Marie Post - couldn't agree with you more.

As my friend Mike Cantu reminds me, "Ask better questions." (A.B.Q.)

@Jessie Youngblood - you'd be wise to ask more questions, too.

Wayne Brooks · Answer

Rick, "economical with the facts",  I'm stealing that!

Ned Carey · Answer

While there is an ethical concern here is you state a "race to the courthouse state?"  In many states he who records first is the owner. If the previous buyer never recorded his deed, you may be above to buy and record your deed and be the rightful owner.

If the taxes are behind why don't you just keep knocking at the door of the home and talk to the buyer and work out a deal with him?

I love working deals like this. Go back and reread what @Eric Belgau said. That is the process.

Jon Klaus · Answer

Ha!  Plus 1 for "economical with the facts."

Chris K. · Answer

I think it's a stretch to say theres a deal unless you talk to the actual owner of the property. You've been talking to a guy who really doesn't have any control over the property. Unless you get in contact with the buyer who just hasnt put it in his name yet and he wants to sell it to you I wouldn't put to much into it.

What should I do???

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