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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (65500)	5/13/2007 3:54:16 PM
From: Chispas	Read Replies (1) of 116555

Sellers' financial problems create a problem for the buyer - Question: My daughter signed a purchase contract to buy a town house. She already paid for the professional inspection, appraisal and credit report for about $650 total. The real estate agent recently informed her there are several liens against the title, and the sellers are having financial difficulties. She said they cannot pay off these liens until they receive the sale proceeds. The title insurer won't issue a title policy until the title is cleared. What happens next? Does that mean the contract is not valid anymore? Answer: Hopefully, your daughter is closing her purchase through a bank, licensed title or escrow firm, or a real estate settlement attorney is handling the closing. The seller liens can be paid off as part of that closing procedure, just the same as when an old mortgage is paid off by using the proceeds of a sale. It would be a smart idea for your daughter to ask for a tentative settlement statement now to be sure the seller will receive enough funds from her down payment and new mortgage to pay off the seller's liens against the property. If the total liens exceed the sales price, then your daughter can cancel the sale and get her deposit refunded -- unless the sellers can pay the excess amount from other sources. The title insurer should give your daughter a preliminary title report showing exactly what liens and their amounts must be paid off from the sales proceeds so marketable title can be conveyed to her. When the sale closes, she should purchase an owners title policy for her protection. orlandosentinel.com

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