Can You Believe This?
I wanted to write a quick note about an interesting issue that has come up with one of my sellers. We were supposed to close on their house today. They were to have the weekend to finish up moving. The buyers would then bring in the painters and the other craftsmen that were to make this home their own. All of that came crashing to a halt last week with a phone call from the closing attorney.
You see, every home sold must be sold with something called clear title. This means some guy who camps out in the musty basement in the courthouse whose job it is to research the ownership records for your home going back 50 or more years, has looked at every transaction and passed a judgement that clear ownership, or title, has occurred each time. Usually there are few if any problems in this process. As soon as the title search comes back clear, the lender can get insurance on the clear title and the closing takes place.
Well, the phone call from the attorney was an eye opener for me. The title search on this home showed that in 1952, the US government declared that this land could never be sold. It was to remain property of the US government, in this case the Corps of Engineers. Cottages only could be built on the home but the land would always be corp property!More
Now, I am sure this property has exchanged hands at least a few times since 1952. I wonder why its now that the title search turns this issue up?
The good news is that the sale of this property is being handled by myself and a very competent buyers agent who have a terrific closing attorney. Can you imagine the problems if this sale was being done as a For Sale By Owner? There is also a cautionary tale here as well. As a home buyer, you should always ask for and purchase a home owner’s title insurance policy. The lender always has the insurance. If this title issue ended being really serious, it could cost the home owner significant money in attorney fees to fix, or in the worst case, they could lose their home and get to keep the mortgage!
Luckily, in this case, the attorneys assure us that we will close within 2 weeks after they have cleaned up this title mess.