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Closing in 36 hours and WOOPS! WE HAVE BEANS AND BIG TRUCKS!

By Theresa Prim

Real Estate Agent with Century 21 Affiliated RB14041377

May 27, 2009 02:51 PM

This is perfect for activerain!

PLEASE HELP ME! HOW WOULD YOU ADVISE YOUR BUYERS???

A month ago my buyers wrote on a foreclosed home with 8 acres. You can easily tell that the back 6 acres or so have been farmed in the past and it looks as though they have plowed the fields to prep for this year. In the purchase agreement, we put a contingency, "subject to NO lease on cropland". As an experienced agent, I knew that even if there was a lease, that it was with the previous owner (WHO PROBABLY TOOK OFF WITH THE RENT MONEY ON THE LAND IN JANUARY, KNOWING THEY WERE LOSING THE HOUSE).

The offer was accepted, and the listing agent told me they were not going to worry about any lease and that "as of the day of closing, the house is your purchasers". GREAT! Just what we wanted to hear.

WELL, IT IS NOW 36 HOURS BEFORE A CLOSING ON FRIDAY, 10 PM AT NIGHT AND MY CELL RINGS. IT'S MY BUYERS MOM...." UM....THERESA....WE HAVE A BIG PROBLEM" Okay, now what in the world is she calling me this time of night for?? She proceeds to say "Um....well.....my son went by the house tonight and the farmer planted already. We have beans!"

HOLY SMOKES! WHAT DO I SAY? HOW DO I ADVISE? I RESEARCHED A COUPLE WEEKS AGO BY CALLING ONE OF THE NEIGHBORS I KNOW AND ASKING HIM IF HE KNEW WHO WAS FARMING IT? HE GAVE US AN ADDRESS AND A NAME AND MY BUYER WENT BY THE GUYS HOUSE TWICE, BUT WHO KNOWS IF HE IS THE FARMER, AND BEING THAT HE WASN'T HOME BOTH TIMES....(PROBABLY OUT PLANTING) MY BUYER TRIED TO FIND HIM WITH MY DIRECTION AND....WELL.....I'M BABBLING!

So, to make matters worse, my buyer has trucks! Big trucks with big tires and was looking so foward to running the land this weekend! He will still run the land this weekend, with ALL OF HIS TOYS!

I suggested that he maybe stop by the county sheriffs department on the way out of the closing? Maybe make them aware of it, and maybe take someone with him to kindly "meet the farmer?"

PLEASE HELP, 35 HOURS AND COUNTING....

THANKS!

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Brenda Harmon

Century 21 Beal, Inc College Station, Texas - College Station, TX

Theresa,

I wouldn't touch this with a ten foot bean pole. Sorry couldn't resist. Your buyer needs legal

representative and fast. DO NOT GIVE LEGAL ADVICE. (unless you are an attorney).

Let us know how this plays out.

May 27, 2009 03:07 PM

Wanda Thomas

Montana Homestead Brokers, Broker, CRS, GRI, SFR, RN - Billings, MT

Billings Montana Real Estate

I like farmers, but wasn't it obvious that the home was vacant? Wouldn't it seem that an agreement made in the past would be at risk since there is no longer a resident on the property? However, I wonder if the farmer had a contract that was still in force, and if so, does he/she have the right to harvest the crops since they were planted prior to closing. I am not an attorney, but is the current owner (bank?), under any obligation to continue the "lease"? Is there a written contract? If not, that would be good for the buyer, bad for the farmer.

I'll be interested to hear how this all works out.

May 27, 2009 03:10 PM

Eric Reid

Renaissance Realty Group of Keller Williams Atlanta Partners - Lawrenceville, GA

I guess I would post a DATED NO Trespassing Sign and make sure he files title asap and maybe take out a legal notice in the legal section of the paper stating title change and notice to terminating all proceeding agreement

You and I know the legal side of the situation but that will not prevent issues getting stured up.. so eduucate the buyer and the public so save issues

May 27, 2009 03:11 PM

Brian Kuhns

Coldwell Banker Roth Wehrly Graber - Fort Wayne, IN

Fort Wayne Real Estate by Brian Kuhns

sounds like you may have been mislead by the listing agent, the tenant farmer has a right to those crops even after the lease has otherwise expired, ignored, violated, broken...whatever. I would advise your client to travel lightly until you find out for sure what's going on so that he doesn't get sued for damage to personal property by the tenant farmer.

May 27, 2009 03:17 PM

Nannette Hilliard

Exit Professional Real Estate - Monroe, WI

CDPE, ABR, CRS

yikes....makes me nervous. good luck

May 27, 2009 03:18 PM

Lynda Eisenmann

Preferred Home Brokers - Brea, CA

Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Theresa,

Interesting situation, you obviously need more information.

First disclosure on my part as a long-time broker/owner I KNOW NOTHING ABOUT PLANTING CROPS, yet if it's a foreclosure sale I would doubt the current owner (lender) would have entered into a lease agreement for crops, right? Any leasehold agreement would have most likely been wiped out with the foreclosure, would they not? It's likely the poor guy who planted the beans may know nothing about the foreclosure.

Bottom line, speak with your broker with whom I'm sure will see legal advice.

May 27, 2009 03:35 PM

Kellie Fitzgerald

Kellie Fitzgerald - Chiricahua Real Estate - Pearce, AZ

Your buyer definitely needs legal representation. In the meantime, have them put up a "no trespassing" sign and most certainly make the local law enforcement people aware of the situation. If this is a typical rural area someone knows who is farming and this situation may actually be resolved more quickly than you think. I've seen these things before and they either go away right away or they linger for a long time. Probably the farmer was not aware the home was vacant and certainly not aware that the property was in foreclosure or even sold.

Do yourself a favor though and make sure your buyers consult with an attorney. Make sure they understand you can not and will not give them legal advice. It is quite possible once the farmer's identity is discovered and they are made aware of the situation the farmer will be reasonable enough to move on. However, they might not be so reasonable, especially if they paid good money to farm the land only to find they were taken.

This is most certainly a difficult situation. Depending on your state's laws this farmer may in fact have rights to the property. Normally though this is when the crops were planted prior to the sale. If that is the case the farmer has a right to the crops. If however the transaction closed before anything was planted that is probably not the case.

Attorney, attorney, attorney...keep repeating this to your clients, in fact, you might want to consult with one yourself.

May 27, 2009 03:42 PM

William Feela

WHISPERING PINES REALTY - North Branch, MN

Realtor, Whispering Pines Realty 651-674-5999 No.

I think having the Local Yokels along to help is a good idea. mean while...I would be looking at calling the agent!!!

May 30, 2009 11:01 AM

Theresa Prim

Century 21 Affiliated - LaPorte, IN

Searching. Sharing. Serving.

IT CLOSED AND RIGHT ON TIME!

The HUD came in on Thursday and final walkthrough was scheduled for Friday at 1 PM. The buyer just happened upon the farmers name on Thursday when he happened to mention to a local that the field was a "no-till". (yes I learn something new everyday)

My buyer knows the farmers daughter from school and called her on Thursday. That was great, because when I talked to the farmer Friday on his cell, he had a heads up to the situation.

My conversation with him was professional, but to the point. When he proceeded to tell me that "THE BANK SHOULD HAVE TOLD HIM THAT THEY WERE TAKING THE HOME BACK" AND after I asked him if he ever had anything in writing with the owner to farm the land...."NO, WE JUST ALWAYS HAD AN UNDERSTANDING" WHEW!!!!!

The closing agent reassured the buyer that there were no recorded agreements that run with the property and that to the best of his knowledge, the title company is providing him title insurance to protect a free and clear title.

Now, hold on to your seats.....I almost had to pull the phone back so the farmer didn't hear me chuckle....but as we were speaking, he proceeded to say, "all your buyer has to do is pay me for my seed and my fertilizer and the land is his"

That is when I stepped back, and told the farmer I would give his cell number to the buyer.

Alls well, seems as though the farmer and the buyer may be exchanging some land for the buyer to run his trucks until the beans come out in September.

8 years in reals estate and learning everyday! Thank you for all of your advice!

Theresa

Jun 01, 2009 01:14 AM

Wanda Thomas

Montana Homestead Brokers, Broker, CRS, GRI, SFR, RN - Billings, MT

Billings Montana Real Estate

I'm glad this is all working out, but really, the bank should have told him? What was the agreement for the farmer using the crop? Was there shares or money involved? Glad they could work out the truck issue.

Jun 01, 2009 03:25 AM