Seller does not have deed, but wants to sell land

Engineer · Troy, MI · Member since 2015 · 37 posts · 4 votes

I got a lead from a mail campaign from a motivated seller. He wants to sell me six different properties which are raw land. The seller said he doesn't have the deed for these so I am not sure if I should even bother to look into the properties to decide on making an offer. The seller doesn't know how or what to do and I should be able to guide him through the process, but I don't know either. Do I tell him to get a quit claim deed from the actual deed holders before investigating the properties?

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Account Closed
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
9y
Don't waste your time. I would drop this deal like a hot potato.
In many western states (Colorado, Wyoming, etc) folks came in and bought large parcels of land...then they subdivided those parcels. You may have heard of land in places like the "Sangre De Cristo Estates" sold by BillyLand or other similar outfits. I learned the hard way, this is how it works...
When you buy land from these outfits, they don't record the sale with the county. It's essentially an un-recorded land contract. That means that while the buyer can legally own the land, they can't sell it, finance it, use it as collateral, etc. They can just hold it.
The rancher that subdivided his land and sold it to the buyer, can still graze his cattle on the land because grazing laws going back to the 1800's allow for it unless the livestock are specifically fenced out. I have yet to know of any folks that bought land like this send out a staker, and spend the money to put in and maintain a barbed wire fence to keep livestock out.
In other words - rancher subdivides his land, sells it but doesn't record it, and still uses the land like s/he did before.
It's a great system! (for the rancher).
I fell for this a while ago - walked away from 3 "low money down" lots when I figured out the scam. The education was worth every penny lost.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Account Closed and all the land guru's you see on BP buy this stuff at tax sale then do exactly what your talking about.. it just now they charge a bunch of money to teach you how to buy mainly unbuildable land
in CA there are probably 1 million parcels like this from one end of the state to the other.
watch the Movie Glen Garry Glen Ross.. this was the 50's land game in FLA and very very true
My dad got started in RE in the early 60s selling land in CA for Boise Cascade.
although Boise put in streets and utls and many times a lake golf course and with Pine Mountain lake an airport.
the issue was the state and county and the time would let them create 5,000 lots but a water system that would only service 500... and same with sewer.. so as environmental laws got tougher. Many of BC 27 developments the did in CA a good portion of the lots by the 80s were not buildable because of septic or water constraint. Buyers of these lots would let them go for tax's the investors of a few decades ago bought them .. then remarketed them in the back of magazines and other ways.
And today its the land academy and other gurus preaching the same thing.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Bryan Blancke go to the county website if there are address's look them up and see who actually owns them.. if your seller is listed as the owner on the tax rolls .. then you have a good chance
land in many parts of the mid west if your talking building lots have zero or Negative value.
when you can buy a nice home for 80k lot and all.. And to replace said house with todays building cost is more than 100k.. then you have zero or negative value in the lot..
Ergo when many props burn down they are never replaced.. owner takes their insurance check and walks.
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Bryan Blancke
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Engineer · Troy, MI · Member since 2015 · 37 posts · 4 votes
9y
@Jay Hinrichs thanks for the response. So one of the properties I looked up it does seem he is the owner according to the county. I can't speak for the other 5 he said he wanted to sell, but even so this property looked like a useless lot. Basically the ending sliver of a subdivision block which is too thin to build a house on. The adjacent house seemed to be parking extra cars on it. The actual boundaries of the property on agentpro247.com were not clear. The other properties parcel ID I was provided showed me no hits on agentpro and since he doesn't seem to have deeds for some reason I didn't invest more time.
Is it worth looking into the other address/parcel IDs I was provided with the county/city or should I just save my time and tell this guy I can't buy his parcels?
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
you can run them down but I suspect this is like many who buy tax sales and end up blowing their dough on useless slivers of lots.. My dad was a big tax sale buyer in the early 60's I learned it from him.. watched many an investor just throw money away over the years..
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Emmett R. McCarthy
Attorney · Chicago, IL · Member since 2015 · 142 posts · 79 votes
9y
You may be dealing with a "wholesaler." These people do not own property but try to put buyers and sellers together for a fee. I recommend doing your own legwork and contacting the owners in addition to researching the properties yourself as noted by @Jay Hinrichs. If they are decent properties, why pay someone a premium for work you can easily do yourself?
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Bryan Blancke
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Engineer · Troy, MI · Member since 2015 · 37 posts · 4 votes
9y
So I got the addresses and parcel IDs from the seller on 7 properties. Most of them checked out and two of them actually looked to be nice lots in a subdivision which don't have a house on them, but seem like they could. Same size as the neighbors lots with houses.
I don't know how the county websites show the seller is the owner of these deeds, but he does not have the deeds available. I want to make an offer on some of the usable land parcels, but how do I close when the seller does not have the deeds?
I also could use any advice related to valuing raw land and figuring out what my offer should be. Delinquent tax on most of the properties he has for sale is a couple hundred bucks on the county websites. All I know other than that is their tax assessed value. How do I value them for my offer amount?
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Ned CareyPro Member
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Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
If the person you are talking to is the actual owner, it doesn't matter if he or she has a deed. When a sale happens the owner does not sign over an existing deed. A new deed is created from the seller to you. The original deed should be recorded in the land records. A title/ escrow company will research to make sure the seller can give you clear title and will draw up the new deed.
Raw land is valued based on what you can do with it. Are these buildable lots? Land is complex and most people don't know haw to value and deal with raw land - Me included. However if you can learn the rules of land, you won't have a lot of competition.
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