A Key Question For Your Real Estate Agent
Does the Seller truly have the authority to sell the property to me?
Sounds pretty basic, but your real estate agent may not have asked the question. If they have, they probably took the word of the listing agent that there “shouldn’t be a problem”.
One of the biggest red flags is having a Seller who is a trustee. Not only should you quickly confirm that the declaration of trust, or trust agreement, exists and is fully executed (by all appropriate parties), but that the agreement hasn’t expired or been revoked. Without such confirmation, a whole host of issues could arise that might cast a shadow on whether you or your lender will receive clean title. And, by the way, the Seller’s name on the title report needs to match the owner of record on both the chain of title and appraisal.
Worst Case? Your lender will decline the loan based on an unacceptable title report, and you will have wasted untold amounts of time and money on a property that was just never going to close.
Best Case? Your closing will be delayed until the title company, escrow agent, attorneys, and lender can sort things out.
Finally, you might be surprised to find out later that your Seller would have been happy to provide you with certain documents you needed to satisfy yourself or your lender. All you needed to do was ask for a:
- Owners policy of title insurance
- Statement showing annual premiums for homeowners or flood insurance
- Recent roof or wind mitigation report