After six years I still learn something new everyday!

I have a client who is buying a home from a seller who purchased the home on the courthouse steps. The seller, with his investment group, paid cash for the property.

As we finalized the agreement with the seller we did negotiate with one disadvantage. We did not know what the seller paid for the home. Why? Because the seller had not filed the deed with the county!

After we finalized the agreement I brought up this point with the seller. The seller waited to file the deed because he did not want any potential buyers to know how much he paid for the home.

This seller has purchased numerous foreclosure homes in the North Atlanta area. After he purchases a home he does what he feels is needed to ready the home for sale. Obviously repairs and upgrades cost money and are taken in account when he prices the home.

The problem in the past is that potential buyers look up the home on the tax records, see what the seller paid for the home, and offer a slightly higher amount. There is no regard for repairs or upgrades made to the home. In many cases he has been offered $5000 to $10,000 more than what he paid for a property!

So this seller holds the deed as long as he can.

Of course once our deal is finalized the deed needs to be filed. If it is not filed the lender will not approve the deal and the lawyer cannot do a credible title search.

An interesting strategy in this crazy market!

 

4 Comments on Why I Did Not File the Deed!

NOV
19
2011
152,047 Points 6 Featured Posts Outside Blog Called Shot Master

Randy, this is a new one on me as well.  I have never heard of this, but I can certainly see how advantageous it would be for the seller.
6:30pm • #1
110,126 Points 4 Featured Posts Outside Blog Hit Router Called Shot Master

Randy,

I have an investor in the family, and she almost never files her deeds either. The one problem I can see with this strategy is that it could create complete chaos if the seller passes away, especially if they own lots of properties.  The family members could be left to sort through a real mess.
6:41pm • #2
403,337 Points 8 Featured Posts Outside Blog Called Shot Master

Randy - Your investor is right.  Buyers do search the public records and if they see a recent sale, they don't want that investor to profit.  It's sad, but they don't understand all of the work and cost that goes into fixing a home up.  It's an interesting strategy that your investor has come up with to delay the information process.
6:59pm • #3
201,522 Points 7 Featured Posts Attended Rain Camp Called Shot Master

This is how the banks are handling foreclosure deeds these days because the HOA will not charge them with the HOA until the foreclosrue deed is filed, they wait until they have an offer to file the sheriff deed.  These are unusual times here in Georgia and across our nation.
8:19pm • #4


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