Break In Before Offer Execution

When I was meeting my buyer last week, to pick up their Earnest Money for their accepted offer on an investment property, we found the home had been recently broken into.   A peek through the window showed standing water in the kitchen.  We were fortunate the police weren't far from the property and only had to wait a few minutes for the officers to accompany our walk through the home to ensure the 'thieves' were no longer present and assess the damage.
Copper was still in tact, surprisingly, though the appliances had clearly been moved.  Turns out the standing water was coming from the fridge being pulled from the wall and opening up the water line.  The dishwasher may have also been leaking, though it wouldn't be until someone tries to disconnect the line and pull it out to check it's status.  There was standing water in the basement, where it is only partially finished with some sheet rock and insulation formed a few rooms.
We returned to the property with a contractor yesterday to assess the damages.  Turns out the burglar(s) attempts at stealing the appliances will cost just over $4000 to bring the home back to the condition it was before the break in.  I was a bit surprised it would cost that much, but then went through the list of items needing correcting again:  Replacing screens that were cut, replacing one broken window, replacing torn and scraped vinyl flooring, pulling out molding sheet rock in the basement and remediation to the area to hinder future growth.
To my buyer, this was a cost they weren't expecting to take on when they went into multiple offers on the property and will in turn request a reduction of purchase price to cure the damage from the break in.   Whether you're an investor or an owner planning to occupy the home, this break in could mean the difference of canceling the offer completely or reducing the offer price to offset the additional repair costs.  Either way, both the buyer and the real estate agent have now spent extra time working on this transaction thanks to those in the business of destroying homes for a quick buck.

LOU Hearing: What Does It All Mean?

I had an investor purchase his first rental last month, where he bought a bank owned property.  Because he was paying cash for the home, it seemed as though it would be a fairly 'easy' process. Buyer chose to use the seller's title company, for ease of the situation and hopefully save some money on the closing fees. Within one week of closing, we found it wasn't going to be as easy of a process as we thought.

We had an initial delay due to a mortgage needing to be cleared on the title before moving on.  After that was complete, we were all set to close a few days later (or so we thought!).  On the day of closing, my buyer was notified that a hearing had been previously scheduled that transfers the property from an Abstract property to Torrens, had not been completed yet.  In order to proceed with the sale, the buyer needed to agree to let this hearing take place after the closing and await the final results of said hearing.   We were somewhat surprised to hear of this, as we were not notified this condition needed to take place prior to this moment.  The buyer was ok with signing off on the Letter of Undertaking, but felt angry that we didn't get notice this needed to be completed prior to the day of closing.

This Letter of Undertaking from the foreclosing attorney, in regards to these hearings, is very common amoungst purchases of bank owned properties. This hearing is one of very few that a buyer can close on a home purchase when it is scheduled after the closing.  With this Letter of Undertaking, we are assured the process will be completed as soon as possible taking into account the length of time it takes to finalize within the court system.  There is little to be concerned of from the buyer's perspective, when the letter from the attorney is issued, as this is part of the job of the foreclosure attorneys and must be completed thoroughly in order for their code of ethics to be followed.  After the hearing takes place and all items on title are cleared and adjusted to Torrens, the new owner will receive notification from the foreclosing attorney verifying the finalization of this process.  In the event the notice isn't received several months after a closing, a buyer can then contact the foreclosing attorney to get verification or an update on the scheduled status.

This process can be cumbersome to a buyer, if they do not get the follow up they are entitled to.  Unfortunately, this is just another aspect of our real estate market that is unavoidable considering the amount of bank owned homes that are being sold these days.

If you have any questions about this or any other real estate issues you may encounter, do not hesitate to give me a call or send me an email.  I look forward to helping ease your concerns and answering the tough questions buyers are afraid to ask.