Selling Your Home - What Can Go Wrong With Title And Lenders
By Raynor James, Fri Dec 9th
If you're selling your home, there are going to be difficultiesat some point in the transaction. Some problems can't be fixed.It's important to figure out whether yours are fixable or not.Then you can either fix them or move on and find another buyer.If it's priced appropriately, there's a buyer out there forvirtually every property.
Title Problems
You get a call from the person searching the title to yourproperty saying your first cousin once removed is shown ashaving a ten percent interest in the property. I hope you (andnot just your lender) have title insurance.
If you don't, perhaps your cousin will sign a "quit claim deed"(or whatever similar term your jurisdiction uses) if her fatherwas paid for
his interest long ago, but nothing was recorded tothat effect with the land records. If that doesn't work, perhapsyour cousin will agree to join in the sale and receive tenpercent of the proceeds.
Failing that, you're probably looking at a court proceeding. Thesale will fall apart, and you'll have to start all over againonce the problem of legal ownership has been resolved. Bummer.Before you put a property on the market, make sure your title isclear.
Lender Objections
Lenders can really punch holes in a home sale. Let's look at afew examples.
Example One
The lender calls and says your garden shed is encroaching onyour neighbor's property, while their fence is on yours. Thelender won't fund the buyer's loan until everything is moved towhere it belongs. Typically, the lender isn't going to backdown. What are your options?
If you get along with your neighbor and can do the work yourself(or can afford to have it done), the problem can be quicklycured. I once saw a very creative resolution to this problem.The shed was on a utility right-of-way. The seller got thecounty to write a letter to the lender saying that if a shedweren't on a poured foundation (it wasn't) and could be moved onnotice, then it wasn't considered an encroachment until/unlesssuch a notice was sent.
Example Two
The lender says your property will appraise for the amountneeded for the loan so long as the following repairs are made.The list of repairs upsets you. Time to take a deep breath andthink. How can you get them taken care of before settlement? Canyou do them? Have them done? Would the buyer be willing to helpout? Is this a deal to walk away from? Regardless of the answer,the key is to make a logical decision not an emotional one.
Example Three
The lender's appraiser comes in with an appraisal that is belowyour agreed sales price. The lender is willing to lend based onthe appraisal, not the previously agreed price.
There are several options for fixing this problem.
1. You can reduce your price to the appraisal price.
2. If the buyer wants your property enough and has enough money,he can pay a larger down payment and leave the purchase pricethe same.
3. The two of you can split the difference; you come down some,and he increases his down payment some.
4. Or, sadly, the deal can fall apart over this issue.
The real key to successfully dealing with problems is to staycalm, open minded, flexible, bottom line oriented, and thinkwin/win. Most of the problems that occur do have solutions. Wejust need to look for them persistently.
About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.
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