Your home purchase settlement is on the horizon (or "closing"). The Buyers want to get into their new home and the sellers, realtors, lender, and everyone else is ready to be paid. Most people aren't concerned with how we get there, as long as its fast and painless. Hopefully, the purchase is issue-free, but what happens when problems pop up? Issues happen all the time. How your settlement agent or company handles those issues separate the best from the rest. Here's a look at common issued we find:
1. Liens/judgments: By far the most common issue, these are unpaid debts that creditors and lenders sued the seller or buyer to collect. Courts give judgments to creditors and lenders, which are usually recorded in the local land records. When the settlement company searches the records to prepare for closing, it looks for any unpaid liens or judgments. If found, they must be paid before settlement.
The solution is often simple. Most liens and judgments are owed by sellers and can be paid out of the seller's proceeds at closing. Settlement happens on time and everyone is happy. Sometimes, it's more complicated. If the Seller already paid the debt, but the creditor didn't release the judgment, or if it's not a valid debt, the Seller might need a lawyer to enforce her rights. That's one of the advantages of having an attorney.
2. Ownership issues: The Seller is ready to sell, but when the settlement company searches the land records someone other than the Seller (or someone in addition to the Seller) owns the property. This might happen after a divorce where one spouse received the house, but a proper deed was not recorded. It might also happen when the Seller inherited the property, or when one spouse dies, leaving ownership of the property uncertain. These issues are often complicated and usually require a lawyer to fix. If there's a real estate attorney on standby, these issued can often be resolved quickly and inexpensively.
3. Boundary issues: The Buyers do a walk-through of the house and land, but when the land records are searched by the settlement company, the property lines are different than the Buyers expected. This might happen if easements are discovered in the records, giving others rights to use the land for drainage, utility lines, or driveways. It could also happen if a neighbor built a fence or garage that encroaches over the property line. These issues might be inherited by the Buyer after settlement. A real estate attorney might be able to enforce legal rights, or at least explain the implications of the issue.
4. Conditions, Covenants, and Restrictions (CCRs): When a home or lot is in a planned neighborhood, chances are there are CCRs that restrict what the owner can do on the property. Sometimes these restrictions are obvious because all of the other homes in the neighborhood are built a certain way. Other times, though, a buyer discovers restrictions after the settlement company searches the records. These restrictions might limit the kind of house the Buyer wants to build, or renovations she wants to make. In some cases, no one in the neighborhood is following the CCRs and the Buyer wants to know if she has to follow them. This is another situation where a real estate attorney comes in handy to explain the legal requirements and risks.
There are many other issues that might come up during settlement. One of the best and worst things about the real estate business is that every transaction is different. At PIKE TITLE we have the expertise to identify issues early, solve them when possible, and protect your legal rights when necessary.