Real Estate Question... Title issues

[Doboji]

So we're all set to close on this 2 bed 1 bath condo in Falls Church, VA.... contract price is $277K. When the title insurance people come back saying that there's some issues with the title. Apparantly the seller has a past bankrupcy, but more importantly there are 2 liens coming up attached to the title. 1 for $200,000 and 1 for $400,000. The seller is saying the liens should have been settled as part of the bankrupcy, and he is currently working through an attorney in an attempt to clear this up.

Meanwhile my life is on hold. Does anyone have any experience with this sort of thing? What happened and any clues about what I can expect would be appreciated.

-Max

 

[HomeBrewerDude]

can you back out? might want to start looking again.

 

[imported_weadjust]

I would give them 30 days to clear it up. If that doesn't happen move on. I doubt they will clear it up in 30 days.

 

[DeMeo]

It's not uncommon.
give them a couple of weeks to clear it up.
Buy title insurance too (if you have not already prepared to do so).

Sometimes when a mortgage is paid off, the lender does not file the release with the registry of deeds (or for some reason it doesn't get recorded). Then when the homeowner goes to sell their house, it shows up in the title search as having an outstanding loan. The title company will contact the lender and obtain the release form and have it recorded. That clears the title.

I saw one not too long ago where this happened and it took a few weeks to clear it up. the seller had paid off the mortgage 15 or 20 years ago. The bank that they had the loan with had since been taken over and then over again ... The orignal bank was long since gone so it took a lot more work for them to come up with the documentation.

As a homeowner, it's a good idea to save documentation if you pay of f loan. Never know when you're going to need to prove it was paid off.

 

[Jeraden]

About a year ago, we bought the empty lot next door to us, which was owned by the person on the other side of it. You'd figure it would be a fairly simple thing to do, as its just an empty lot with trees and stuff (wanted to clear it out and make it part of our yard). We thought everything was finalized to close on it, but the title search came back saying it still had a mortgage attached to it or something. Actually, I'm not 100% sure what the issue was, but it took 3 months to get straighted out. I'm not really sure what took so long, but we weren't really in all that big of a rush to get it, so not sure if we'd have been able to escalate things to get them moving faster or not. So anyways, don't count on it being resolved overnight or anything.

 

[Doboji]

So from what I'm reading it is possible to resolve... the question is one of time then. From what I hear currently his lawyer has requested copies of the bankrupcy papers. The question is... am I looking at 2 weeks or 3 months?

-Max

 

[Garet Jax]

Originally posted by: Doboji
So we're all set to close on this 2 bed 1 bath condo in Falls Church, VA.... contract price is $277K. When the title insurance people come back saying that there's some issues with the title. Apparantly the seller has a past bankrupcy, but more importantly there are 2 liens coming up attached to the title. 1 for $200,000 and 1 for $400,000. The seller is saying the liens should have been settled as part of the bankrupcy, and he is currently working through an attorney in an attempt to clear this up.

Meanwhile my life is on hold. Does anyone have any experience with this sort of thing? What happened and any clues about what I can expect would be appreciated.

-Max

Not much you can do about it to speed it up. Make sure that you buy Title insurance. Make sure it is buyer's title insurance as well as title companies insurance.

 

[Sluggo]

In case you didnt catch it in the other posts.....Buy the title insurance!!

 

[Doboji]

Yeah one step ahead there... I have title insurance... thats how this whole thing came up in the first place.

-Max