I wanted to write to you about a specific incident involving one of my investor clients.
My client can spot a good deal in seconds. However, there can be many unforseen problems with foreclosure properties. One day he called me up to open the door at a house located between Triana and Madison. It was a foreclosed property. It was 3 bedrooms and 1 bath, a basic ranch. It only needed a little TLC to bring it back up to a sellable property. So, my client spent the next month completing the repairs. He also included a new washer, dryer, dishwasher and refrigerator. He repainted and recarpeted the house.
When he was done, a family member to the previous owner wanted to buy the property. This was a very sweet deal for me, the seller and buyer already confirmed before listing the property. We did the paper work and the buyer qualified for an FHA loan. So, I ordered the title work and got the mortgage underwriting process moving.
This deal didn't end up being so sweet. The loan was rejected at the appraisal process. The appraiser couldn't find any comparibles within 5 miles of this property. I even tried to find sold properties for them. We couldn't prove a reasonable value making it unmarketable.
Then I received a call from the title company. The title company revealed the property was land locked. There was a very small parcel of land between the house and the road owned by another family member of the previous owner. The gravel drive from the road was owned by that family member. The title search for the foreclosure should have revealed the land locked condition. Also, the title search at the point my client purchased should have revealed the problem. I am not sure as to why it was not rectified by an attorney in Birmingham who managed the foreclosure. However, all my client can do is file a claim against the title insurance. I think the title company is recommending he do this.
Now, I will always recommend to my investor clients purchasing investment properties to do a new title search before they buy any Huntsville Al real estate, especially foreclosures. The office of Michael Brodowski are very thorough and I haven't seen their staff miss anything. They caught this problem and told me it was due to negligence by the other attornies.
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