Why You Must Have a Competent Licensed Title Company
From Tom Nardone, Millionaire Mailman …
Recently one of my students got a deal under contract on a house that the seller had owned for decades.
When the seller bought the house decades earlier, they went ahead and bought it without getting the title checked or getting a title insurance policy. Upon examination of the title for my student to get ready to close, it appears there was a gap in the title.
The person the current seller bought the house from never recorded the deed on the official record books and therefore there is a gap in the title. The prior owner, who the seller purchased the house from is now deceased, and the process of the title company trying to track down the past heirs of the previous sellers estate has begun.
ALWAYS get a title insurance policy from a title company you trust.
Right now I’m buying a high-end property from a seller, where the seller was upside down and we had to do a short sale.
There were 3 mortgages on the house, and more than $90K owed to the HOA.
In a swift action, the HOA within 2 months swooped in and foreclosed on the property and took over the title.
Now my short sale switched from buying from the seller, who was in foreclosure, over to buying the house from the HOA.
But in the foreclosure process, there was not a proper return of service for one of the lien holders, and if a lien holder was not given proper notice in the foreclosure, then the lien can still stick. The HOA will now have to re-foreclose out the interest of the lien holder that they failed to give proper notice to.
All this takes time, and it’s really of no concern to me because it can work to my advantage. I have the property tied up under contract, and I have ZERO dollars down for earnest money deposit.
My contract is acting like somewhat of an “option” on the property to buy it at a specific price, and the market is slowly going up.
There is always a chance that the lender may want to renegotiate the deal as the market goes up, but I know the lender just wants to get out of the bad loan they created and close.
So the moral of this story is…
Always, always, always get the title checked by a competent title company, and be patient when title problems arise.
In the case of the title gap with my student’s deal, the house is in a market that’s going up. So if he can get the same price today that the seller agreed on in a year from now, it will be an even better deal that it is today.
Enjoy the Journey!