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What does that mean? What is Not Obvious?
If we knew, then it would be obvious. We know it when we see it.
With only 5 or 10 real estate transaction, you are less likely to see the snakes, landmines and grassfires. You do not know where snakes are likely to hide.
In the last 25 years the world has become more complicated. Government and large institutions have more laws, rules, regulations and policies which change frequently when personnel change the rules and policies or when clerks do not know nor understand their changing rules.
With hundreds and hundreds of real estate transactions I know where lenders and government regulators hide the snakes. Sometimes title closing companies help to kill the snakes, but sometimes they are the snake. I have used a well known title insurance closer with years of experience. I send lots of title insurance business to several specific title companies and they will work to help me solve your problem.
As you listen to these podcast episodes, you will hear real estate transaction nightmares and how we solved the problem.
We want to know your expectations and concerns …. We have 25 years of experience and hundred and hundreds of transactions. We have analyzed thousands and thousands of properties, therefore we know that contracts can be written to solve a problem before it becomes a problem and to protect your money and time. Unfortunately, inexperienced real estate agents and brokers do not know where the snakes hide. My 28 years as a licensed property tax consultant and 25 years with a real estate license … helps me to reveal the Not Obvious …. To anticipate problems.
As an example. I know transaction contract language to reduce your future property taxes. In 25 years, I have never seen another broker add language to a contract to save money on future property taxes.
Real estate brokerage clients are often too concerned about price and sales commissions. They do not know that I can help with language to reduce property taxes and I may even know how to lenders to reduce interest rate expense or reduce pre-payment penalties.
Last year a lender demanded a specific form for a preliminary closing statement from the title insurance company …. On a form which the State of Texas not longer allows, therefore the deal would die three days before the closing date and buyer would lose acquisitions costs. The seller would need to find a different buyer and disturb tenants again for more buyer due diligence needs.
I must compliment that title insurance company that I recommended because the closer found the outdated software to create a preliminary copy of the outdated closing statement form and sent it to the clerk at the lending institution. Later the title insurance company created the correct legal updated form to close the deal. Whew.
On a separate deal for a small multifamily apartment property, the lender would not accept the legal description used by the county court house. The property was located in Houston, but the post master general is located in a nearby city, therefore the mailing address is not in Houston. The lender wanted the sales contract to show the property address to be in the other city with the postmaster general office.
Also a block away, just a year earlier, When selling a four plex, the buyer did inspections and wanted $20,000 in repair money, which we negotiated down to $2,000.
They claimed that the electrical boxes needed to be replaced at a very high cost, because they were a fire hazard. The name brand had been discontinued due to the bad publicity. There are 13 other fourplexs in the neighborhood and I had sold 9 of them. They all had the same brand electrical boxes and None of them had a fire since their construction in 1982.
When selling a 16 unit multifamily apartment property building, The terms were agreeable to both buyer and seller. The seller agreed to contribute repair money to the seller, through a deposit to an escrow account at the title closing escrow company. Residential contracts do not have this feature, due to lender regulations, however commercial contracts are Not regulated.
The Not Obvious challenge, some title escrow closing companies, will not take fund deposits in escrow for buyer repairs. The title escrow company may not want to have those funds on deposit.
Some lenders of larger commercial loans, want those repair funds send to the lender. Sometimes the lenders of smaller loan amounts will let the title company give a cash credit to the buyer at closing for the smaller repair amounts.
Sometimes after closing the deal, the title company requires a letter from the buyer to pay specific repair contractors.
Thus some title escrow closing companies will not escrow repair funds. The Not Obvious challenges is knowing which title escrow closing company to be named in the contract. Usually the other agent does not know and the seller does not know the NOT Obvious.
We need to know a title escrow closing company which will allow the escrow for buyer repair funds
Land Surveys for residential properties may cost $600 and commercial surveys may cost $2,000 or $4,000 depending on the size of the property and the type of survey.
Will the current seller’s survey be acceptable to the title company and lender? Does it include the metes and bounds on the second page? Frequently sellers only keep the graphic boundary survey and during the years, they lose the second page with written metes and bounds.
Read the seller’s survey carefully, to know when it was completed and if copywrited. In the last ten years, most surveyors have added small print to prevent using the survey for multiple transactions. Some title company examiners will not accept older surveys.
If the buyer needs to hire a surveyor, what type of survey is best and what will it cost? This is especially important after the recent flooding. You should ask what type of survey is required by your lender. Is an elevation survey required?
I helped a seller of an auto repair shop and he was happy and retired. He got bored and purchased another auto repair without my help. The bank lender agreed to loan on the property, even though the Environmental Consultant’s Report showed a suspected leak from the convenience store gas tanks on the property next door. This makes it difficult for the new owner to sell at a later date. I suspect that he did not read the Environmental Report. When I read the Environmental Report, it was Not clear nor straightforward that the property was getting gas leaks from the convenience store gas tanks.
It was subtle about the suspected pollution, because you actually have to test the soil on the property you want to buy. That soil dig and analysis may cost $8,000 or higher. Unfortunately, the client did not hire me to help him purchase the polluted property. I would have told him about the future challenge of selling a suspected polluted property. The seller decided to pay off the loan and seller finance to the new buyer.
Over the recent years, there has become an increasing problem with plumbing under the slab. Some of the pipes are rotting metal and not PVC plastic. So I now a form for buyers and sellers to sign which can accommodate the buyer hiring a plumber for a hydrostatic plumbing test.
I reveal the Not Obvious.