Need some help - Title Insurance question....

[Chris Simotas]

Hello all, i'll try to keep this somewhat brief and to the point.  My wife and I have an accepted offer on an investment property, our first, which we plan to renovate and sell as quickly as possible.  The house was offered "AS-IS" and we're buying with cash.

After the AO, it was disclosed to us that a "Paper-Road" runs through the property and is the responsibility of the homeowner to maintain this parcel, which is about 25 feet worth of side yard.  Homeowner pays taxes on it, about $250 annually, but doesn't technically own the parcel.

During title search, my lawyer discovered that given the status of this second parcel, the title company will not issue insurance on this...only on the MAIN parcel where the house sits.

A little more background....the lady we are buying from has been in the house since the late 50's and the status if this second parcel of land hasn't changed. She has used it as her own, paid a small amount of tax on it and has never had any issue.

This is all fine for us, as cash investors....My concern is going forward once we relist the house for sale, will it be an issue for perspective buyers when trying to secure a mortgage if the title company won't insure the second parcel/paper road?  

Any help is appreciated.  Neither our broker, nor attorney has ever dealt with a paper road and this type of off scenario with a second parcel of land.  

Thanks!