We have an executed contract & now owe the bank money for appraisal & flood certification. The seller can't produce a clear title and we can't close, since they have breached contract can we legally make them pay the bank or is this something we have to pay. Now we are looking for another house & will have to pay for an appraisal & flood certification fee when we close on it.
2007-07-31 05:41:33 · 11 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
What exactly is the title defect?
Every contract for real estate carries an implied obligation to produce a marketable title. If the seller cannot produce a marketable title, then the seller is in breach of contract. You can sue the seller for any damages you incurred as a result of the seller's breach. Unless the seller is willing to pay for your appraisal and flood certificate, you may need to pay for these yourself and sue the seller in small claims.
In most jurisdictions, you can also sue the seller for specific performance (i.e. force him to deliver the defective title to you) and receive a reduction in the contracted purchase price to cover the cost to fix the defective title.
2007-07-31 06:37:44 · answer #1 · answered by Mr Placid 7 · 0⤊ 0⤋
Not a whole lot you can do, except to bite your tongue, take the losses and move on to next property.
Seller can not sell with clouded title, therefore seller would cancel the contract or refuse to extend the contract which essentially cancels the contract and refund your earnest money deposit. Seller did not breach the contract, because seller is still willing to sell you the clouded title, but you wouldn't buy it. Seller can extend the contract until the cloud clears, but you may not be willing to wait, in which case you will request to cancel the contract. Seller never asked you to order appraisal or inspection or survey or elevation certificate or anything, that is the expense you ordered and incurred so that you can fulfil your side of the contract. Seller never agreed or implied that he will pay for any of these expenses.
Seller's agent is not obligated either because part of completing the transaction is due diligence or title search. At the time of signing contract no one is aware of this cloud or if they do, they are simply trying to negotiate with you to buy a clouded title. None of this can be proved in courts. There is no specific performance suit against seller, since seller can not legally fulfil the specific performance. There is a specific performance law-suit after the title is cleared and if the contract is still in effect.
I have had this very same situation happen, where seller was very eager to sell the clouded title to a cash buyer, while my contract was in place with financing contingency. Seller simply let my contract run out. I had attorney and spent hours reading up and there was nothing I could do. To top it off the seller's agent had the contract signed not by the seller but by someone who claims to have had the power of attorney, so in my case seller never really even have a contract with me. The seller's agent refused to provide power of attorney and a complaint is being registered with real estate commission, but the most he is going to get is a slap on the wrist, because he signed the contract with the person who listed the property with him and whether the person who listed is the actual owner or not is not the agent's obligation to find out and if it is his responsibility to find out than he violated some minor code of the license law. Basically I was being sold "Brooklyn Bridge" and I thought I had a legitimate contract.
2014-03-01 00:14:04 · answer #2 · answered by pickinurbrains 1 · 0⤊ 0⤋
If there's a clout on the sellers title, all you need to find out, is there enough equity in the sale to pay off their lien and produce a clean title. Your escrow officer should be able to tell you this or even the RE broker if they are old hands at this business.
Unless you're dealing with amateurs in the business, you had better get another RE broker or Title Officer to secure a close....otherwise you need a small claims suit against all parties and one will shake the coins loose in their pockets from the sales commission that will be drawn from the sale and move on to another deal to make their commission.
They just might have to comp this one to you to 'close'
2007-07-31 05:51:50 · answer #3 · answered by CW L 3 · 1⤊ 0⤋
you need quality local counsel with serious real estate experience and immediately
possible ... you think this is dead and go looking for another house and find it, then make an offer. meanwhile, seller of this property repairs the title defect and then sues you to close on the deal. You now have two houses and can afford only one. Plus, you can't get a loan for either, so you lose and big time.
GL
2007-07-31 05:48:33 · answer #4 · answered by Spock (rhp) 7 · 0⤊ 0⤋
Yes, you can probably sue them. They should be willing to buy you off with the $350-400 you spent, instead of getting sued for not being able to complete their contractual obligation.
If they won't, demand it out of their realtor. Threaten to file a complaint with your state's commerce or real estate dept (whoever licenses agents) for incompetence. The agent should've verified the sellers could actually sell their home before listing it in the first place. That's real estate 101.
2007-07-31 17:19:04 · answer #5 · answered by Yanswersmonitorsarenazis 5 · 1⤊ 0⤋
Every state is different, but look on your contract to see how they are to be held responsible. In Colorado, you have a choice to make them perform (fix the title and close) or pay for damages, or both. Talk to your Realtor and good luck!!
2007-07-31 06:17:56 · answer #6 · answered by sweetsum691 5 · 0⤊ 0⤋
how did your agent allow you to offer on a house with a clouded title? he/she should have seen potential problems from the prelim or a property profile. you need to make your agent pay for the appraisal and flood certs from the botched transaction!
this is why r.e. agents are paid so highly! we are not supposed to make this type of dumb mistake and when we do, we need to do the right thing!
2007-07-31 05:46:35 · answer #7 · answered by chieko 7 · 0⤊ 0⤋
You could sue them in small claims court for the money you are out, since they said they had the right to sell and then did not. It's not your fault they did not have a clear title.
2007-07-31 05:45:31 · answer #8 · answered by marie 7 · 0⤊ 0⤋
I would simply tell them to refund my money. My daughter in law works for a finance company and I know of a couple of automobiles that they have in storage waiting for titles because of foreclosure/repo and they have been sitting over 2 years, she told me they may have to junk them because of no title. Good Luck,
2016-03-16 03:55:01 · answer #9 · answered by ? 4 · 0⤊ 0⤋
Contact a local lawyer to see what the laws in your state are regarding this.
2007-07-31 05:44:37 · answer #10 · answered by Anonymous · 0⤊ 0⤋