Home Buying in Bonita>Question Details

Jobean, Home Buyer in Bonita, CA

title report just revealed $78 k in judgments and tax liens that the seller "had no idea" were there, says to give her a few days... any?

Asked by Jobean, Bonita, CA Sat Aug 6, 2011

options? We are purchasing in San Diego for $180k, putting half down, financing the other half, which is roughly equal to the total liens on property. Seller owns a business, but I think it is in the hole, too. They do not have other properties that I know of. We put our offer in on 4/15, waited 4 months for the approval letter, nobody ran any checks prior to the title report being requested by our lender. This is outrageous. And the seller is a real estate agent!

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If you waited four months for an Approval Letter, this sounds like a Short Sale. That being the case, your Agent
should have requesgted a Preliminary Title from the escrow the next day your contract was signed by the Seller.

The fact that the seller is a Real Estate Agent does you no good. They are in it for themselves. Your Real Estate Agent should be representing you. And that Agent should know how to maneuver through a Short Sale. And it is
not an easy process. That agent needs to stay focused on what is happening with the sale. The Agent should be contacting the Lender for the Approval Letter at least once a week. I find it hard to believe that the Seller did not know that he/she/they had a judgemet of $78k against the property, especially if it was a court case.

Your agent shouuld have called for a Preliminary Title as soon as the property was placed in escrow. And
your agent should have also asked the proper questions of the seller to determine if additional liens were
attached to the property. You need an agent who knows what they are doing? If your agent does not have Short
Sale experience, you are in for a bumpy ride.


I just completed a short sale for my client, and I was successful because I stayed focus. We had the deal
done in less than 30 days. But it was hard work and constant communication with the Lenders and the
the Sellers Agent, as well as Escrow. Don't get caught in paying the Lien off for the Seller, and don't buy the property if the Lien can't be removed for whatever reason.


Good luck, and God Bless!!

Claudette Reynolds
619-825-9823
1 vote Thank Flag Link Sat Aug 6, 2011
As a title representative, I do see on occasion, information posted that should be for someone else. Even a preliminary title report might not initially show the correct information. IRS liens and judgements are filed against the person, not the property, so a Statement of Identity/Information (SI) is used to get Social Security numbers , drivers license numbers, prior addresses, other names, past spouses etc. This information is then used to properly place the liens/judgments. I recommend my agents get the SI at the time of listing to minimize errors.
1 vote Thank Flag Link Sat Aug 6, 2011
Unfortunately many people have a real estate license that don't know what they're doing. The current market we are in is very challenging. Choosing a Realtor with experience has never been more important.
To be honest with you the agent representing you on the buying side should have asked the proper questions in the beginning along with making sure you had a prelim in the very beginning of escrow.
Before I write an offer I ask the listing agent some key questions to decide if they know what they are doing or not so I can let my buyer know how confident I am in the transaction closing.
Look to see if an agent has a CHS or CDPE by their name next time.
1 vote Thank Flag Link Sat Aug 6, 2011
The Seller is trying to put you in a position where you will have to help with the liens so that the deal can go thru.
Seller isn't stupid; probably crafty.
$180 in San Diego is a rare find.
Looks like all you have to do is be patient.
You do have a Buyer's Agent representing you, right?

Good luck and may God bless
1 vote Thank Flag Link Sat Aug 6, 2011
A good listing agent of any short sale will pull a title report before even listing a short sale disclosing all liens so they know who to negotiate with, the other thing is every buyer should then pull a title report to cover their own basis, it can be down for relatively no cost and can even be done on your own. As a buyer you need to know what type of negotiations are neede dto be able to get approval so you can make an offer in the first place. Your buyer agent should have done this for you. If you are buying on your own, you should have had the attorney that reviewed your sales contract conduct it.

At this point it is unlikely this sale will close anytime soon or if at all, first mortage lenders will not want to take less if someone in second position gets anything form the sale as the liens get wiped out if they foreclose. i wold not put anything more than $1000 down to hold the house and make sure it is held by a bonded agent or attorney in their escrow account, do not gove any money to the seller to hold.

http://www.trulia.com/blog/scott_godzyk/2010/10/so_you_want_…


Please review my blog with tips and advice on buying ashort sale
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Sat Aug 6, 2011
This may be a little bit of a stretch but in many ways the current state of the RE market is somewhat reminiscent of the stock market in that the stock market factors in anticipated chaos and adjusts accordingly. That in part is why the big boys stay and play and the more unsophisticated investor tends to divest and run as was evidenced in the recent S&P credit downgrade that triggered the sell off we've been seeing for the last several sessions.

What I see happening in the RE market is similar. The more sophisticated and cash laden investor has adjusted in anticipated loss or gain in value and is buying to hold and rent/lease while the average Johnny Six Packer and Linda Lunch bucket continue to straddle the fence.

Albeit RE is local and many areas of the Country are seeing an increase in sales the ongoing negative economic news, unemployment, political dysfunction, shadow inventory, etc. continue to stifle the RE market overall making it less desirable for the average buyer to pull the trigger.

However, having said that now that America has been downgraded money will become more expensive which is likely to drive interest rates up. Folks with ARMs and HELOCs may see an upswing in their loan balances and it could even trigger concern for investors.

So before that happens the best thing the RE professional can do is to inform fence sitters that if they're considering buying a home to live in for at least several years that now's the time to do it. Money will no doubt be more expensive and that can and probably will further exacerbate the RE market. Just my opinion for what it's worth.
0 votes Thank Flag Link Sun Aug 7, 2011
Jobean,
I'm sorry you find yourself in this situation. I too am surprised that this was found so late, but it does happen on occassion. The listing agent really should have found this out, and if not your buyers agent should have....but that is neither here nor there now.

Is there a lawyer working on the short sale negotiations? He/She may be able to help the seller negotiate the liens, but my assumtion given that this is a short-sale is that the seller doesn't have the funds to pay off the liens and may be looking to you to 'help out'.

I would talk to your agent and your legal representaiton to figure out what the best next steps are for you. Good luck!
0 votes Thank Flag Link Sun Aug 7, 2011
There's some missing info here.. are you actually in an "Official" Escrow with a known escrow company? If so they would have had the Title Report (PR) for you within the 1st week or less. If the seller is an agent and conducting this as a private party transaction you may be able to take this up with his broker. It's not normally allowed. A lot of folks answering from out of state don't quite get our system here in Calif. If you put a Good Faith Deposit down and you want to cancel the escrow/transaction you can and still get back all your deposit within the first 17 days of opening escrow. To open though the lender has to approve the sale. If that's not done then there is really no official contract. We also don't use lawyers during a transaction unless things get really sticky and hamstrung. This state also doesn't "bond" agents. Brokers carry E&O insurance. As for the leans, the lender probably won't pay them at all. That will leave it up to you and the seller to work out. If you are not willing to help the seller pay them off and he/she can't then your deal is dead.
0 votes Thank Flag Link Sat Aug 6, 2011
Sounds pretty icky sticky to me. I'd be saying.............................NEXT!!
0 votes Thank Flag Link Sat Aug 6, 2011
It is possible that the seller had no idea. Someimes things show up on the title that are for someone of a similiar name. Give them a little time to investigate and get back to you.
0 votes Thank Flag Link Sat Aug 6, 2011
Seller muct provide clear title to you at closing.Have your escrow agent or attorney follow with seller to have the negative items cleared from title.
0 votes Thank Flag Link Sat Aug 6, 2011
Put nothing down till closing, this is a shaky sale by far, this lady has nearly half the home's sale price in liens, if there is a bank holding a Mortgage on this home as well it may not get clear title for some time and definitely not with out a lot of negotiation!
0 votes Thank Flag Link Sat Aug 6, 2011
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