All posts tagged: REO

Please, Please, Please Get A Survey!!!

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I am not making this up, though I wish I were. Maybe by sharing this story I can prevent you from making the same mistake of not getting a survey when you purchase property. (Please note that certain aspects of the story have been changed to protect the identity of those involved.)

This is the tale of an older lady who thought she was getting a deal on a distressed property with a house. She paid $35,000 in cash and closed without a survey…because she didn’t need one because she was paying cash—you only need a survey if there’s a bank involved, right? She moved into the house and lived there for six months before she found out what she had actually paid for was the four acres of vacant land behind the house.

The house had been winterized, there was a sign out front, and the buyer lady was using a Realtor. The buyer paid cash for a Bank-Owned Property (or REO), and closed without a survey. The legal description of the contract used the abbreviated tax reference. The bank had winterized the wrong house, and six months after the buyer was in full possession, the couple from California who owned the house politely informed the lady that she was in her house.

The lady had purchased the four-acre piece of property behind the one acre up front where the house was. Now she’s going to have to pay another $64,900 for a home and land she thought she already owned. She didn’t have a clue. She had paid $35,000 for four acres of vacant land worth about $11,000—an expensive mistake! She just spent $29,900 to find out what a $300 survey could have told her. What she thought was a good deal turned out to be a nightmare all because she wanted to save $300 on a survey.

For the bank, “AS IS” is “Where Is.”

Please, please, please don’t make this mistake—GET A SURVEY!!! Without a survey, title insurance can’t cover you for this kind of error. Spend a few hundred dollars on a survey, even if it’s a cash deal—ESPECIALLY IF IT’S A CASH DEAL. Spend a few hundred dollars on a survey to save thousands of dollars in a mistake.

If you are paying cash, you need a survey more than ever because your cash is the money at risk.

Really this is Reason Number 2 to get title insurance (Remember: the Number 1 Reason is because it’s expensive to be innocent!). It shows up on my true story list of “1001 Reasons to Get Title Insurance” as Number 7.

Stephen CollinsPlease, Please, Please Get A Survey!!!
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Title Wave

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Surf’s up! It’s a great time to have title insurance! There are a lot of great deals in the real estate market with REO’s and foreclosure sales. You can pick up an investment property or a primary residence for a bargain purchase price. Don’t be pennywise and pound foolish.

Just because you saved a bundle on the purchase price doesn’t mean you should go on a cheap streak and not buy title insurance. Regrettably the real estate industry has gone through some hard times, especially in the documentation of who owns the note. People think they’re getting a great buy, then it turns out the company they bought from did not have the rightful authority to sell it. The sale gets challenged in court and the new homeowners have to defend their ownership from somebody else’s error.

That legal defense is dang expensive!

Or it can be a smaller title problem, like a dispute over a property line. Maybe the neighbor’s survey puts the line six feet over the homeowner’s easement. That’s not as dramatic, but you still have to face a claim or litigation. Again: Dang expensive!

Title insurance pays claims or litigation costs if there’s a debate over a title. Doesn’t matter whether it’s a question of the entire property or a just a property line location, title insurance pays your legal fees to defend your ownership. It doesn’t give a discount towards legal fees—it pays them. Period.

With the current conditions of the documentation, we are likely to see more confusion over a property title both now and in the future, making this a great time to have title insurance.

Stephen CollinsTitle Wave
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