Investor · Decatur Atlanta, GA · Member since 2011 · 612 posts · 232 votes
We purchased a home before it went into foreclosure directly from an individual. We used an attorney and got title insurance. We remodeled and have a solid contract. The attorney for the buyer is the father of the couple.
He keeps trying to complete the title back 20 years even though we have a title insurance. Our P&A states they only need to be able to get title insurance. The seller to us had no liens, but there 2 other people with similiar names, but different addresses and he wants a "No Me" Affidivat.
Am I missing something here? Is he being overzealous? we gave them 45 days to close, their loan is fine, their due dilligence is completed, if they don't close on scheduled date should we refuse unless they lower the closing cost we offered? I'm sick of their agent and they backed out once before. We had 3 offers on 3 consecutive days AFTER we signed the deal with them so I'm confident we can sale, but we're getting close to the holidays.
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Get title insurance through the company you used for your purchase; they should even be able to give a discounted re-issue rate. As things stand, that title insurer is on the hook for whatever defects are there anyway ... you should be able to make a claim against your policy if you can't get title insurance.
Your contact has availability of title insurance as a contingency? If they don't close on the scheduled date because they can't procure title insurance that means title insurance wasn't available. So, you don't extend the contract. Is there a problem I 'm not seeing. :)
We got title insurance when we purchased it from the original seller. Now that we are selling it to a buyer they are saying there are title issues. My question is why can't they get title insurance if I got title insurance without a problem?
You are lucky the attorney only wants to go back 20 years. It is much more common where I live, to go back 40 or even 60 years. The title attorney doing the current closing will not issue title insurance unless he or she is confident of the title and researched it totally.
The fact you had title insurance does not mean that the new owner will get it if the title agent finds a defect in the title your attorney didn't find. I don't think the title agent is being overzealous, that is their job.
Most purchase and sale contracts say the seller provides marketable title free and clear of all liens. If the delay is settlement is due to title issues, that is YOUR delay. You are responsible to provide free and clear title.
I know that is not what you want to hear but that is the way I see it.
If your buyer is having buyers remorse, especially considering title issues, you may be able to get out of the deal and move on to another buyer. Have you brought this up with the buyer? Keep in mind the next buyer may have the same issues and delays. Good luck - Ned
As I reread K. Marie Poes response let me clarify where we differ.
As she said, if the contract is Contingent upon title insurance, then you can simply choose not to extend.
If the contract says title will be insurable, but not contingent upon that fact, then I still say you as the seller are in default. Unless the contract says otherwise in the defaults and remedies clause, I believe the buyer would have the right to extend while the title is cleared.
Get title insurance through the company you used for your purchase; they should even be able to give a discounted re-issue rate. As things stand, that title insurer is on the hook for whatever defects are there anyway ... you should be able to make a claim against your policy if you can't get title insurance.
Do I have any recourse against my attorney? Shouldnt he have resolved those when I closed as the buyer? My original attorney office acts as one of three attorney offices that handle courthouse sales and Ive used that firm but not that attorney before.
I agree with Ned, plus any lender would require a confirmation of clear title. If a title issue exists, it will exist for any buyer, so it is your issue. If you can't provide clear title, that is a problem.
Hopefully when you purchased, they didn't overlook liens and judgements that were rightfully attached BUT if they did.....it appears to be a problem the title company will have to resolve. Afterall, it sounds like you got insurance for clear title when you purchased. I am curious to know if you paid cash, or if you got a loan.
If I were you, I would get right in the center of their investigation to make sure it is resolved. This buyer could absolutely be in earnest, but simply unable to close because of a title issue.
As I reread K. Marie Poes response let me clarify where we differ.
As she said, if the contract is Contingent upon title insurance, then you can simply choose not to extend.
If the contract says title will be insurable, but not contingent upon that fact, then I still say you as the seller are in default. Unless the contract says otherwise in the defaults and remedies clause, I believe the buyer would have the right to extend while the title is cleared.
Ned Carey My own simple, 3-page contract says that purchase (or sale) is contingent upon availability of title insurance. I don't know what the realtor board contracts say, which is likely what the OPs contract is, since he said agents are involved.
As for rights to extend: there are no automatically allowed, one-party extensions that I'm aware of in the standard RE contract here. Where I am, escrow will not agree to an extension where only one party agrees to it. All parties sign the amended escrow instructions or the amended contract or everyone is "out of contract". There is failure to perform on a contract, which requires a law suit if someone wants to force performance.
Title insurers vary in their underwriting requirements just like medical insurers and auto insurers. In my area, I find that title insurers will rely heavily on the previously insured sale, if there was one. If the previous sale was uninsured, they will require notarized affidavits from the seller. It sounds like the title insurer on this sale is requiring more than your previous insurer. That's normal since everyone's risk tolerance is different. Since I often pay for title insurance both when I'm the seller and the buyer, I use title companies that work for me.
What's customary in your area? Who pays for the policy and are there any regs about who selects the title company?
Buyer pays for title insurance. In this case the property is in metro Atlanta. The attorney is the buyers son,but the attorney is from a smaller county 90 miles away and is unfamiliar with the area.
Ned is correct, exactly.
Also, most. Standard purchase contracts do provide for an automatic extension of time if seller can not provide title, for the purpose of curing any title defects.
Thanks for all the great info. The folks on this site have so much knowledge and more importantly experience. The more you do the more you know I'm finding out after one year