How Should I Prepare To Buy Or Sell A Property?
If you are preparing to sell your residential property, the home inspection report is most valuable. You do not need the report in writing immediately; however, you can try to get obvious broken things fixed first. Also, you do not need the title abstract at the time that you are preparing to sell a single-family home unless it is a situation where there is a divorce or death in the family and the title is not yet transferred. On the buyer’s side, just be very honest with yourself about how much money you have for a down payment and what you can afford. Talk to a lender and get a pre-approval of a loan in a certain amount.
On the commercial side, there is much more diligence required. The seller needs to have records of maintenance, repairs, rents, deposits and taxes. If there are tenants in the building that is being sold, copies of all the leases, an up to date report or rent roll, and records of who has paid and who has not are required. Get all your information lined up, as well as a physical inspection.
From the buyer’s standpoint, it is more a question of what kind of down payment he or she has, how much the lender is going to lend, and whether this is a tax deferred exchange where a buyer has money from another sale and he or she must complete the sale in a certain period of time. Those deadlines are very strict.
What Are Some Common Issues With Title That Can Hold Up Or Derail A Real Estate Transaction?
The first common title issue is where there is some title defect, such as a previous transfer which was never recorded, there is an error in the deed, or there is a party who claims to be an owner. There may be a notice of action pending on the property, where someone else is just claiming an ownership interest in the property. Sometimes, there is a problem from a previous owner, where the deed was signed by the wrong party or there is an error in the legal description.
A mechanic’s lien is another issue we often see. For example, a general contractor hires a subcontractor to do something, such as pouring concrete. The general contractor and the subcontractor then fight. The general contractor pays the subcontractor some money but not all that is owed. The subcontractor files a lien against the entire property and then the owner has to clean it up. Often, that takes months and it can easily derail a deal. Sometimes, there are IRS or California Franchise Tax Board liens and when you get ready to close, there is not enough money to pay off all the people who want to get paid. You have to, somehow, eliminate that tax lien or get a reduction of the payoff, so that you can actually close. These things happen more often than people expect.
For more information on Preparing For A Real Estate Transaction, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (949) 833-8388 today.
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