The beginning of this story is rather simple. Investor wants property. Broker finds property which is a foreclosure. Buyer makes an acceptable offer, Seller accepts offer. Awh… this is really easy. Closing set for three weeks. Buyer’s attorney receives contract and begins title search. Abstractor for the buyer’s attorney finds a minor problem but thinks they can dig a bit further and find the solution. Buyer’s attorney contacts Broker, client and Lender (Buyers) and says that the title company who will be issuing the insurance has a problem with two minor issues which the Sellers attorney will need to resolve. Problem one: This foreclosure was the result of a default of the window of the mortgagor. She had been granted an administrative deed by the probate court over the property initially but after a number of years defaulted. The only problem with this is that the name of the deed was incorrect. You see a designation (the Third) had been left off. The second issue was that in the administrative deed there is no mention of any children (there are 2) and their disposition as related to the property. Additionally, there are no records of any quick claim deeds having been registered on behalf of either of these adult children. OK, this sounds simple; we simply inform the Sellers attorney that these issues need to be resolve. Sure it’s a pain but shouldn’t take more than a few days.
Now here’s the part where it begins to get interesting. The Sellers attorney says it is his position that there is no need to worry about anything since 1.) It has been 5 years since the administrative deed was issued 2.) They had a good title that was insured which covered the administrative deed. So it should be acceptable to the Buyers attorney and the title insurance company.
Well guess what? The buyer’s attorney is now in direct communication and is stating that his title insurance company will accept the name variance since in the court records the deceased is referred to in at least three ways all annotated as the legal name. But on the issue of the children they are requiring a quick claim deed. Well, the Sellers attorney is not going to resolve it and the buyer’s attorney continues in the position that this is something the Sellers attorney has to resolve. My buyer continues to want the property and will close if this is resolved. The latest activity was this morning when I reviewed the present status with the buyer. Who asked a rather simple question, which I forwarded on to the Seller’s and his attorney. “Since it is the Seller’s position that a clear title can be issued with the administrative deed as it stands then why can not he perform the closing.” If he will do this then the Buyer’s attorney will simply have to release the title research his abstractor had done. Of coarse the buyer’s attorney would be compensated for it and we would close. We are currently awaiting the Seller’s attorney’s response.
It has been a very interesting experience. Fortunately my client is a seasoned investor. But the conflict between attorneys has been and is the issue. Neither will move to resolve the issue. The fact that they are both hurting the interests of the Seller and the Buyer seems to evade them. Or perhaps I am missing something that says this isn’t the case, you tell me.
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