Dishing Up About an Escrow That Almost Didn't Close- Sad but True

Dishing Up About an Escrow That Almost Didn't Close- Sad but True

Dishing Up About an Escrow That Almost Didn't Close- Sad but True

Recently I had a cute little house that a seller contacted me to sell. I had it listed the next day and received 5 offers immediately. The sellers selected one and viola...we are in escrow. It had happened so fast that the PRELIM had not arrived before we opened escrow as I usually get to review it for any RED FLAGS ahead of time.

This was an older home and had 6 liens on it and most were from the 70's. The original owner was deceased and his daughters was selling the home.

Through a business partner and an investigator we cleared up 3 liens right away. OK..piece of cake I thought. Then the investigator found the 2 family members from 2 notes of a deceased business partner so one sibling signed off immediately as she remembered these loans had been paid off years ago. The second sibling who we tracked down in Alabama says "How much is the house worth and how much is the lien owed my parents and do I get interest on the note too?" Well, I could see where this was going and I thought it might end up in litigation and she was not going to notarize any documents. Plus through further investigation, the original loan company had closed in the early 90's too and the documents had been destroyed in 2004. Well, we are dead in the water!

So that night I called up the sellers and said is there anywhere you have not looked for the signed off notes? They had gone through the storage, in the garage and office but thought there might be a few more boxes in the basement. A few minutes later they texted me that they had found the notes and the lien holders had signed off in the early 90's. Hallelujah I thought so now we are set to close.

In the mean time, there was an attorney lien and the seller was shocked as she had paid the bill in full after her divorce while still in the courtroom that day. So the attorney had put a lien on afterwards!!!! Escrow contacted the attorney and he said he remembered it was paid in full and was surprised but sorry for the mistake and said to send him the documents and he would sign off. It was a 2 page document and he sent back 1 page. Title didn't realize this until we were funding and then when they contacted the attorney again the day of closing, he now remembered he hadn't been paid and he wanted interest on the note. OMG..we are not going to close. The seller contacted the bank who found the check and printed it which they quickly took to escrow and this satisfied the title company F-I-N-A-L-L-Y.

Yea, we closed and the sellers got their money and the buyers got their new home. HAPPY DAY!

What a snafu for the sellers and they worked hard to find the notes, help track down the siblings, and without their dedication and help, it would not have closed. I am so thankful for their hard work as this could have been a mess in court for years.

Do you know what is on your own home title report? Pull a PRELIM and check 'before' you sell your home. And keep your check copies of any important loan payoffs or even construction debts to make it easier to prove later. Computers fail, Records get lost and Companies close down so keep your records.  This is something we should all do once a year!

One last thing; FILE a reconveyance note when you pay off a note so it is removed from your title. Do not leave it for your siblings or children to deal with later.

*The names and locations have been changed to protect the innocent and the guilty.