All Forum Posts by: Michelle S.

Dear BP Family, 

I am in the middle of buying a new house. Looks like the previous owner (not the current one) got the house via foreclosure and there was a state tax lien on the house. What should I do to ensure I have a good marketable title so that I don't have any issues when I try to sell the property in the future? Any risks for the title? 

I was in the middle of closing a deal and found out the title has some issue. Thanks BP family's help and advice. I want to summarize some red flags to watch out when you are buying a house (also I want to record this for my future reference). 

1) Big lender does not want to lend without reason. Quicken loan is always my lender and they provided me with a pre-approved letter too. This time, when I gave them the house address I was going to purchase and they said they would not provide a loan for this house. I asked why. They did not give me a clear reason. 

2) Big insurance company does not want to insure. I always use liberty mutual and this time when they put the house data into their system, their system does not allow them to insure. I asked why and also the why is not clear. 

3) Seller counter offered me by changing closing attorney. When I put my offer in, on my offer it contains the closing attorney I chose. The seller counter offered me with an attorney they chose. I was ok with that. Now, I realize this is a red flag too. 

4) Seller tried to change the closing attorney he picked originally before the closing without giving me a clear reason. This is SUPER BIG RED flag. Something is definitely going wrong here. You have to follow up with the original attorney and get your legal advice to follow up the reason. 

Any other red flags you want to add? 


 

Roofstock is an easy platform to put an offer on a house, most internal staff are very helpful and I love Roofstock Academy. However, always ensure you are doing your due diligence carefully! Also, sometimes, it is hard to get ahold with the key people who are representing or helping you on your deal (especially for the Roofstock select listings), so be ready to step in and represent yourself. 

 

@Joe S. Good questions! The answers are I am going to look for another property. I am not getting a low enough price to justify these uncertainties. 

@Peter Walther yes. The deal is full of red flags. For example, the house contains two parcels, but at the beginning, the seller only provided one parcel number on the contract. I found the second one on the county board of assessors website and provided the information to my lender. Due to my lender's request, the seller added the additional parcel number into the amendment. Not sure if it is a red flag or just simple "forgot". 

@Peter Walther nope.  

Ok. I insisted on using the original closing attorney, my bank backed me up and FINALLY I got a detailed explanation from the original closing attorney.  

The Seller acquired the property through a tax sale. When you acquire a property through a tax sale, there are typically two additional steps you need to take to perfect the title in your name.

First, you have to foreclose the previous owner’s right to redeem the property. It looks like the seller did complete this step.

Second, you have to file a Quiet Title action with a court of competent jurisdiction and you must receive a Final Order on the Quiet Title Action. The seller never performed this step, and the original attorney's title companies will not agree to insure the transaction until a Quiet Title Action has been finalized (a Quiet Title Action can take several weeks or a few months depending on the facts of the case).

The new closing attorney (the one the seller wants to change to) did issue the Seller an Owner’s Title Policy that was insured through Investor’s Title Insurance Company. Since Investor’s Title already insured the Seller, they may agree to reinsure my loan interest and my ownership interest without requiring a Quiet Title Action.

----- Now I am wondering if I should pull out, wait for the Quiet Title Action to finish or anything else? Any recommendations @BP family? 

 

@David Wandel good point David!  

I had the similar experience last year. I was buying a property out of state. I wired earnest money and there was no issue there. Before the closing, I got a secured email from a staff who was working in the attorney' office and provided me a new wiring instruction. I went to my bank and tried to wire the money. The bank told me that it was a scam. My bank got in touch with the attorney partner directly and confirmed that I should use the same wiring information as the earnest money. I still did not get any explanation from the attorney why and how their staff could send me an scam instruction in a secured email. 

Thanks @Peter Walther. The seller wants me to sign an amendment "all parties acknowledge the closing attorney shall be **** (the new attorney)". If I reject to sign the amendment, can I still keep the previous attorney as the closing attorney? Also, my agent told me if I reject to sign, I need to pay two attorney fees (the previous one and the new one). I don't think it makes sense because I haven't agreed on the change of attorney yet.