LandInvestors.com Forums **Ask A Question** The best way to learn is to experience it – got hit with lien

  • Creator
    Topic
  • #17594

    Milan
    Participant
    Post count: 523

    Long story short: I bought 40 acres few months ago for $4K. Did all my do diligence. All was good. County recorded it and I was a proud owner.

    The land wasn’t selling – thank god it wasn’t! That would be a serious mess!!!

    Last week I received a letter from law office telling me that my property will be auctioned at certain date. I can pay the lien of 4K. No too big deal.

    The point is, if I resold the property, that will seriously destroy my reputation selling property to clueless excited buyer.

    I’m learning intensively how to check for liens now. What is your process?

    There are a lot of questions about liens on this forum. But no one really answered it.

Viewing 10 replies - 1 through 10 (of 10 total)
  • Author
    Replies
  • Blake Jones
    Participant
    Post count: 66
    Pro

    Great topic and question Milan. What kind of due diligence did you do for title when you bought it? Did you check online records with the county?

    Rod Hall
    Participant
    Post count: 294
    Pro

    What is the lien and how is it they can sell it at auction? Why didn’t they take the property from your seller and sell it at auction?

    Milan
    Participant
    Post count: 523

    Yes I called the county. Owner all was matching. No due taxes.

    Problem was this: property was deeded to him by warranty deed. The deed of trust wasn’t recorded with it on that particular parcel.

    Did you guys know that? Even if you do the deed of trust, the property is imediatelly deeded to you without anything writen on deed. And this is warranty deed. I didn’t know it. Now I know. You know now too.

    I didn’t know the fact, that even if you are buying property on deed of trust, the property is deeded to you. It’s like you own it free and clear. That’s where I stopped searching. I thought this guy owns it free and clear. So bought it confidently.

    What ended up being is: he bought 8 properties from this law firm on deed of trust all together. But the deed of trust wasn’t recorded with this parcel.

    I learned the lesson to not only search the parcel info and things associated with it. Also search names.

    Milan
    Participant
    Post count: 523

    That’s the problem Rod. They are taking the property from me, because I bought it from him. It’s really that simple. I have warranty deed from him and all I can do with it is to complain to nobody.

    Either I pay it or its auctioned.

    Rod Hall
    Participant
    Post count: 294
    Pro

    Oh, I see what you are saying. Bummer. You didn’t search for a deed of trust/release on the property because the warranty deed gave your seller ownership. Yes, and I recently found a release of deed of trust that was very vague with only names and the subdivision name. (no parcel or description) Went with my gut on that one.

    Matt
    Participant
    Post count: 159
    Pro

    Milan can you go through the chain of title for me again? I want to understand what the situation was but I’m having a tough time following. So the law office owned them, and sells 8 of them to your seller via a deed of trust. However he received them with a warranty deed also?

    My understanding would be if he bought them on a deed of trust then there would eventually need to be a release of some sort when the deed of trust was fully satisfied. Then they’re officially the seller’s properties.

    Where did the warranty deed come in?

    Thanks!

    Matt

    Milan
    Participant
    Post count: 523

    I’m still learning this too. I’m still not clear about the way deed of trust works. But from now on when I got burned I’m going to become an expert on it hahaha.

    Obviously it’s a financing deal done through title company. Everyone knows this.

    What I learned and I was quite surprised by it is that upon the signing of the seller to a buyer in deed of trust title company delivers a deed. This deed looks like you own the land free and clear. There is nothing writen on the deed. At least in my particular case it wasn’t.

    The lien is recorded somewhere on the side. I believe it should be recorded with the property. It’s not recorded with this one.

    Anyway, the thing I learned is that if you see perfectly looking deed, that is the evidence of ownership, there still might be lien on it recorded somewhere. That’s why you should also search the name of the seller in the county. I didn’t. If I did I would catch it most likely. Anyway, not a big deal.

    Lesson learned – do a good thorough due dilligence. Now I understand a little bit why title comoanies take so long to insure the property.

    Michael Aillon
    Participant
    Post count: 292
    Pro

    following….

    Matt
    Participant
    Post count: 159
    Pro

    Milan,

    Ok so I’ve got two parts in this reply haha;

    1) So it sounds like when your seller bought the property they bought it on a deed of trust, however the title company gave them a warranty deed and recorded that? Rather than what I am familiar with, the title company would issue a deed of trust, then once the terms were paid off the seller would sign a “deed of reconveyance” which officially releases the seller from the lien. If that’s the case, and there was no deed of trust recorded in the seller’s name then I don’t see how you’d catch this one, thats funky haha.

    2) I’ve always kind of wished that this program came with homework haha. For example, research the following 5 properties and report back on their chain of title (i.e. compare what you found to the “answer key”). It would be 5 common scenarios that we could practice on. What I’m getting at is that it would be awesome if you’d be willing to share the county and APN of the property so that we could practice pulling the docs for ourselves and recognize the issue in a no pressure situation. If you don’t want to share the info to the whole group I get that, I would love for you to PM me so I could look it over and try to figure out how I can make sure my systems are set up such that I catch a similar mistake.

    Thanks again for sharing this one, it’s super interesting.

    Sincerely,

    Matt

    Milan
    Participant
    Post count: 523

    I did PMed you Matt the apn. I won’t share this publicly for now. More people are effected by this. There are 8 properties on this deed.

    And other people might not be handling it the way I am . I am good. Get up, dust yourself, hop on the horse and keep going.

    It also might make sense to pay the lien. I bought it for 4K, lean is 4K for mine – sell for 8K. Get all money out of it. But the properties are not selling for 8K there now. It’s more like 6K.

    I might just walk away from it. Still deciding. But I’m feeling sorry for the others who bet their little farm on it.

Viewing 10 replies - 1 through 10 (of 10 total)

You must be logged in to reply to this topic.