Tried to buy a house this weekend. Fortunately, our Realtor is pretty kick a$$ when it comes to doing her job, but the listing agent slapped this property on the market without doing any of his basic checks. Sellers can often be clueless when it comes to remembering things properly, and IMO it is the listing agent's responsibility to do some research on claims. It is in their best interest to do so, so that they don't spend time and money marketing the property just to have it fall though for some undisclosed problem. When I was listing properties I would have a quick title search done to see just how much was out in loans, who was on the deeds, and if there were any quirks that needed documentation or to be addressed before putting it on the market. It was impressive how many titles were still in a deceased name, how many had loans secured by the property that they didn't realize had to be included in the mortgage info, how many ex-spouses were still on the deed and would need to be wrestled with.The property I wanted to buy was listed as "waterfront." Well, no, it's not. But supposedly there is deeded access to the river. Getting the deed from the county offices on Monday showed that deeded access did not transfer with sale of property however. And the septic system seemed to be for a two bedroom, not a three, though supposedly it was added on to. And there is a shared well, which fortunately has a strong written agreement with the neighbor. Unfortunately, that written agreement includes a right of first refusal on purchase contracts for the property of interest....which my agent found out about when she tracked down the owner of the property with the well and called them. Then we called the listing agent and let him know.The property itself was great, but a hot mess legally. It should have been cleaned up before it got put on the market. And even then, disclose the right of first refusal so you don't waste my time and travel money.Sellers, find your deed, and any documentation you may have for well, septic, plat/survey. Give copies to your listing agent. It can make the world of difference as to how fast a deal can move if all those documents are ready to give to an interested party.IP,who has learned not to waste money on things like inspection and appraisals before eyeballing those documents
IP,I gave you a rec for your post. Although the experience was a pain in the a$$ (to use your words) it is a valuable instruction for those of us who read about it. Best,Ken, Fool
...it is a valuable instruction for those of us who read about it.Thanks, Ken. That was pretty much my point in posting. I wish this were an isolated case, but surprisingly this sort of incident happens with relative frequency on the properties we bid on. Happily, it is amazing what these supporting documents will tell you if you take the time to read them. We found out the hard way not to wait for the title company to figure it out for us, since by the time it gets to them you've already paid for multiple expensive things necessary in moving a purchase through to settlement.And it can be impressive what was not found out in the not so distant past. Case in point, the seller of this property gave deeded right of river access to the people he sold the lot with the well to, probably in the 1990's. Yes, the ones who have right of first refusal on the sale of his property. Problem is, it was not his to give. How the heck does he compensate them for that? Sure hope they bought title insurance. I would love to be a fly on the wall when the neighbors find out their river access property really isn't. The view alone is worth something, but deeded access bumps up market value significantly, particularly for these people who use it as a vacation rental, where water access bumps up rents several hundred dollars a week over water view, and results in more weeks rented.What a mess.IP
inparadise: "And it can be impressive what was not found out in the not so distant past. Case in point, the seller of this property gave deeded right of river access to the people he sold the lot with the well to, probably in the 1990's. Yes, the ones who have right of first refusal on the sale of his property. Problem is, it was not his to give."I am not following. Could you elaborate?If I understand correctly, the seller of the current property could have given an easement over it so that the lot with the well (and the right of refusal) have access to the river. Or not?Regards, JAFO
The seller of the property "gave" deeded access to the buyers of the lot with the well. Unfortunately, per his deed on his own property, it was not a right he had to give. His deed allows him access to the river when he bought his lot from a third party who owns the river frontage, permission which is terminated upon sale of his property to another.Even if the lot with the well originally had permission when our seller owned it, when he sold it to the vacation rental owner, that permission from the river front property owner terminated. I have zero understanding how it wound up on the well owners deed, given it was never our seller's to offer. They would have had to renegotiate with the owner of the river frontage, not our seller.IP
IP: Thanks. I understand now.It would be interesting to know whether the owner of lot with the well got title insurance that included the river access or only the fee title to the lot actually acquired.This information also gives you some leverage, perhaps to dissuade such lot owner from exercising the right of refusal because you could inform the thrid-party river lot owner.Regards, JAFO
This information also gives you some leverage, perhaps to dissuade such lot owner from exercising the right of refusal because you could inform the thrid-party river lot owner.Eh, I walk away from collecting Karma like that. Particularly when buying a property to use as a vacation rental, you need to be on good terms with all the neighbors. Besides, it is a very small community, and both the competition and the riverfront owner are very old families. I would be viewed as the interloper looking to make trouble.IP,a firm believer that you get what you give somewhere along the line
a firm believer that you get what you give somewhere along the lineAgreed. But I am looking forward to hearing how this plays out!Kathleen
Agreed. But I am looking forward to hearing how this plays out!Sorry to disappoint, but I walked away from the deal. Told my agent to let the listing agent know how much I was willing to bid, IF they get the water access back or if she can get the waterfront owners to sell it to me. This way they will know if the agreement they can come to with the owners next door is too low.It is a hot mess, the listing agent of the old laissez faire school, and the owner close to 90. I'll bang my head against a brick wall if I think it's worth while, but I have other properties to pursue. Even my agent concurred this was a property to walk away from. I will ask her to keep tabs on it and hopefully let me know how it wound up.IP
IP,I can well believe that mess. I researched the house we sold a few years back, as well as the lot we built on - both on the same street in our 25-house "subdivision". It was an interesting glimpse into history.If you have a few hours (or days), go down the your County Courthouse and research your own title. The history you uncover can be fascinating.For example, the original indenture for our little subdivision started with some hand-written entries in the county record books from around 1938. The original orchard owner decided he could make a bit of money by selling lots instead of fruit. Easements to various utilities have references to other pages with titles and easements in the books. The original indenture specified that homes couldn't be sold to Blacks or Jews. Everyone blithely ignored those provisions during the last 3 or 4 decades. Finally MDH, during his second stint as a Trustee a few years back, pushed through a revised indenture that removed the ethnicity issues and simplified many other tangled provisions. We have several Jewish and Chinese families, an Indian family, a Black family and a Filipino family as homeowners on this short street. The mother of the new set of twins has some awesome tattoos, although she is white<g>. We're very inclusive, so long as everyone keeps up their property and helps the neighbors out. In fact, the Indian Mom teaches a Sunday yoga class for whomever wants to attend, including older children. There's talk of Sunday afternoon walks, once the weather warms up and the spring rains stop.
The original indenture specified that homes couldn't be sold to Blacks or Jews. Everyone blithely ignored those provisions during the last 3 or 4 decades.Since they were already inapplicable because of 1968 Fair housing Act, I would certainly hope they'd ignore them.... If they didn't ignore them they'd actually be breaking that law.
If you have a few hours (or days), go down the your County Courthouse and research your own title.I agree this can be interesting for older properties, and in fact deeply researched a rehab I did that is now about 275 years old. That was fascinating, requiring me to go to the historical society and search the tax records on the micro fiche. But this place was built in the 1970's, with the transfer of river access permission that was not his to give in the '90s. Just should not have happened.More on do your leg work before paying for things like inspection and appraisals: was interested in a property high above a river. This area got hit a couple of years ago with flooding 16' higher than previous record when Tropical Storm Lee stalled over them for about 3 days, and the property only got a bit of water in the basement which the sump pump dealt with. Owners relayed that they paid $300/year in flood insurance, but contacting an agent for a quote returned an annual premium of $2,550/year. That adds about $200/mo to the PITI, whereas giving the sellers the extra $20K they wanted over our original offer would have raised our PITI only $75. The property will be so hard to market with that millstone around it's neck.Flood maps have changed considerably in the past several years. When I was still a Realtor, many properties were all of the sudden subject to flood insurance, even with no history of flooding or water in sight. Can't assume it won't be required.IP
The original indenture specified that homes couldn't be sold to Blacks or Jews. Everyone blithely ignored those provisions during the last 3 or 4 decades.One house I bought had an indenture stating "residents of a home must be of a single race" and one saying the property could not be sold to a "citizen of the Ottoman Empire". Thought that second one was odd...
It is always legal responsibility of the Listing Agent to get ALL of the details of the listed property correct before it goes-up in the MLS listing.That is a rather definitive statement given that real estate law varies from state to state. I can tell you that it has not been the case in any of the states I have had real estate transactions in, nor was it the case when I went for licensing to sell real estate in PA. There are enough legal disclaimers to choke a horse on the listing contract, listing, purchase and sales contract, etc, most of which tell you that the info is subject to errors and omissions, buyer beware, that the Realtor/broker is not a lawyer and you should get one if you have questions. In the various states I've experienced RE, it is actually the title insurance that makes sure the details are correct, and insures you against their having screwed up. But if you wait until that point to verify, you will have paid for many expensive things like appraisal and inspection.No one should ever count on the listing agent or their selling agent to have gotten it right. In some states RE licensing is so easy to get that you might not even need a pulse to get it.IP
It is always the legal responsibility of the Listing Agent to get ALL of the details of the listed property correct before it goes-up in the MLS listing. Never mind that is there always a disclosure like this:*Note: All room dimensions, including square footage data, are approximate and must be verified by the buyer.The information contained herein is furnished by the owner to the best of his/her knowledge, but is subject to verification by the purchaser, and agent assumes no responsibility for the correctness thereof.or this:All information provided by the listing agent/broker is deemed reliable but is not guaranteed and should be independently verified. on every MLS listing. AJ
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |