Posted by I.R. on July 17, 2003 at 08:02:46:
Can you buy a RE with bad title?
Sure. Nothing keeping some fool from buying that “Rolex” the bum on the corner’s selling for $20.
P.T. Barnum said there’s one born every minute & I guess he was right.
Unethical Investors… - Posted by Mike
Posted by Mike on July 16, 2003 at 07:01:42:
I live in the NY area where investing is extremely competitive. It is not uncommon to over pay for a home and still make money! I mentioned to an investor friend, or who I thought was a friend, that I was going to purchase a piece of property at a great price. He told me that he may approach the owner, offer them more money and buy the house from under me! I proceeded to say that the moment I go into contract (which will likely be within a day or so) I would record the contract at the county clerk. After he was done laughing, he said that will do nothing. I told him it would cloud the title, and he said big deal. If I am an all cash buyer, with no bank involved I can still buy the house without clear title. The house will be mine and you will have to try to get it back.
Does anyone know what to do if this actually happens? Is it true that an all cash buyer may still buy a house with a clouded title. Since there are no banks involved to be concerned about title insurance, does this mean I will face years of litigation?
Thanks for any help.
Re: Unethical Investors… - Posted by Tony-VA/NC
Posted by Tony-VA/NC on July 19, 2003 at 12:10:24:
Mike,
You learned a lot from this “friend.” You learned that he is not to be trusted.
You learned not to talk too much, especially before you have a property purchased. It is ok to ask general questions but address specific is a bit risky with your kind of friends listening.
Yes, your friend could buy the property with the title clouded. He may have some trouble later on when he sells because his buyer will likely want to use financing and the cloud will surface then. Then he will have to call you.
I am not a lawyer so this is no legal opinion, but if you have a valid contract in place, you have the seller to go after as well if he violates your contract. That may not be too bad since he now has your friends cash.
The good news is that chances are that your “friend” will not be investing long by overpaying for properties, especially when he is paying all cash. Cash, for most, is a limited resource. If he dumps cash on a bad deal just to spite you, then that is less cash he has to close other deals.
Chances are this “friend” is only beating his chest. It sounds like he believes himself to be superior in experience to you in real estate and wanted to show off. He would not be the first to do so but for you, he can now be the last.
Take the lesson learned and move on.
Best Wishes,
Tony