Advise on land/home purchase

Discussion in 'Homesteading Questions' started by DayBird, Aug 7, 2004.

  1. DayBird

    DayBird Big Bird

    Messages:
    2,173
    Joined:
    Jul 25, 2004
    Location:
    Pell City, AL
    Help, please.

    We are going Monday morning to look at an 18 year old, newly remodeled doublewide sitting on 3.5 acres of sloping land. The main road is atop a mountain ridge, there's one neighbor directly across the road from us, one to our left, an empty wooded lot to our right and a 5 acre lot behind us with horses. The previous owners had a garden, had planted some fruit trees and started to clear some of the wooded area. The only animal they had was a dog so the property has no fences. We want two goats, some chickens and geese, and several small pole barns to raise our exotic birds (mostly parrots) There is no zoning and most of the surrounding neighbors have animals. It's outside of city limits and the county doesn't have any special building codes. The septic system is only 5 years old. I am going to ask when was the last time it was pumped out. The house has been empty since April. It is a forclosed home and is only $24,500.00. I'm concerned that there's a one year "right of redemption" that lasts until April of 2005. I am told by the realtor that property is almost never redeemed and that any money paid and/or invested by us must be reimbursed to us, as well as the remainder of the mortgage to be paid by the previous owner if he/she wishes to redeem it. Is this standard? What would be some of our specific concerns to question the realtor about?


    Thanks,
    the Days (Robert, Donna, Jonathan and Daniel)
     
  2. Cyngbaeld

    Cyngbaeld In Remembrance Supporter

    Messages:
    28,248
    Joined:
    May 20, 2004
    Location:
    SE Missouri
    I expect that is a state law that the realtor is refering to. It is certainly not the case in every state. I know some states even have laws that make the new owner liable for previous liens against the property. It may turn out to be a good deal or it could be a nightmare. I'd check it out throughly before agreeing to anything.
     

  3. AngieM2

    AngieM2 Big Front Porch advocate Supporter

    Messages:
    44,836
    Joined:
    May 10, 2002
    DayBird
    those rules are the same as what was told to me by 2 different realtors up here in N. Alabama. so possibly they are true.

    AngieM2
     
  4. RAC

    RAC Guest

    Go down to the county offices and get the straight scoop from them on this "right of redemption".

    Do NOT trust a real estate agent to give advise about legal matters. Yes, most are very knowlegdeable and honest, but laws change all the time, and not everyone pays attention when they do.
     
  5. AngieM2

    AngieM2 Big Front Porch advocate Supporter

    Messages:
    44,836
    Joined:
    May 10, 2002
  6. DayBird

    DayBird Big Bird

    Messages:
    2,173
    Joined:
    Jul 25, 2004
    Location:
    Pell City, AL

    Thanks everyone.
    Would the county courthouse keep records of liens?
    I have planned on going by there as soon as we leave the property. What specific questions should I ask the realtor? Should I insist on a new survey? Even if there would be less land specified, I still think this is a great value. Similar sized properties without a home are listed as high as $60,000 just around the corner less than 2 miles down the road. I would just want to know exactly where the property lines are. The doublewide has a brand spanking new shiny metal room complete with new gutters. I know that I need to know about any specific restrictions or covenants regarding animals.

    Does a forclosed home typically require a new mortgage or could we (if we wanted to) or would we (won't have any choice) in just assuming the previous owners mortgage and just take up the remaining payments? Either way, it would be very affordable for us. Like I mentioned, there's 3 acres "unimproved" with no driveway or septic, water lines or power pole for $20,000 and 3 acres "improved" for $34,000 and 5 acres "improved" for $70,000 all along this same mountain top each listed by 3 different agencies.

    It just sounds too good to be true. We've walked around the property twice already. It's wonderful and beautiful. We get to go inside Monday. Even if we have to completely redo major repairs inside, it's still got to be better where we are now in a tiny singlewide in a trailer park, across the road from my mother and stepdad (huge mistake), with a nasty septic tank.
     
  7. Cyngbaeld

    Cyngbaeld In Remembrance Supporter

    Messages:
    28,248
    Joined:
    May 20, 2004
    Location:
    SE Missouri
    You will have to get a new mortgage. A foreclosed mortgage is not assumable. It is prob cheap because people can get very nervous about possibly having someone come back and redeem the home later. You will need to be sure you get title insurance. The insurance is supposed to cover any previous liens. Make sure it does. Ask the title company and get it in writting. Any work you have done and any expenses including closing costs will need to be carefully documented, just in case the previous owners try to redeem. It really isn't too likely they will do so. I bought a foreclosed home in colorado and had no problems with liens, but I don't know if the laws are different. I think they prob are. I also made sure I had title insurance.
     
  8. tngirl

    tngirl Well-Known Member

    Messages:
    105
    Joined:
    Mar 10, 2004
    Location:
    Washington, Georgia
    Please keep us informed on whatever you decide. It sounds like a great deal. I'm keeping all fingers and toes crossed that it works out for you. I'm so wxcited for you. Good luck! :D
     
  9. sancraft

    sancraft Well-Known Member

    Messages:
    5,961
    Joined:
    Jun 7, 2002
    Location:
    Georgia
    That was me above. My DD was logged on. :D She's excited for you too.
     
  10. Jen H

    Jen H Well-Known Member

    Messages:
    2,832
    Joined:
    Jun 16, 2004
    Location:
    Washington
    If you can, have the property surveyed before you purchase it. Structure your offer so that you pay x dollars per acre. It sounds like this offer is legitimate, and it probably is. At the same time, you don't want to build all sorts of outbuildings and put up fences only to find out 3 years down the road that Joe Schmoe actually owns that land and wants to build a house.

    When we purchased the land we live on now, we tried to have the seller pay for a survey. He refused. We paid for the survey ourselves, and even tho the property was exactly as he portrayed it I consider it money very well spent.
     
  11. Stand_Watie

    Stand_Watie Well-Known Member

    Messages:
    115
    Joined:
    May 22, 2004
    Location:
    Texas - midway between Dallas and Tyler
    I'll second what Cyngbaeld said about the title insurance. You want to protect yourself from any leinholders from way back when. It will cost you a few hundred dollars extra, but is worth it.
     
  12. PonderosaQ

    PonderosaQ Well-Known Member Supporter

    Messages:
    1,834
    Joined:
    Jan 12, 2004
    Location:
    SW VA
    A friend of mine just bought a place under similar circumstances about 3 weeks ago. Since it was harder to sell under those circumstances the owner, a bank, PAID for a special type ins that would pay off any claim that came up on the property so there is no way he can lose it. Lawyer OK'd it being done that way. Ask yours for advice and yes do pay for title ins.

    I hope this works out for you. Sounds like a good deal for you even if you do need to do major repairs inside. We just redid a single wide for my daughter and it is now a lovely cozy sheetrocked walled home. She is moving in this weekend.

    Good luck,
    PQ
     
  13. DayBird

    DayBird Big Bird

    Messages:
    2,173
    Joined:
    Jul 25, 2004
    Location:
    Pell City, AL
    Someone has already put in sheetrock and new toilets and fixtures (pretty, new brushed nickle faucets). There's a new metal roof with great looking gutters. From looking in the windows, we'd have to paint and we'd want to rip out all the ugly brown carpets. My wife wants to just paint the floor underneath the carpets. Our long term plan is to eventually build a house.

    Thanks for the information about the title insurance. We will certainly do that. That will automatically protect us from all previous liens?

    Since I do want to put up fences for some goats, I am going to have it surveyed. Not sure if I am going to do this before or after we buy it, however. Even if it turns out to be only 2 acres, I still think it's a great deal.

    What other, very specific questions should we ask the realtor? I'm taking notes.

    thanks
     
  14. That might be your answer. If it sounds too good to be true, it probably is.

    Definitely get the title insurance and have it surveyed. What you think may be yours might not be. And be prepared for big expenses due at closing.

    Best of luck!
     
  15. Gercarson

    Gercarson Well-Known Member Supporter

    Messages:
    2,130
    Joined:
    Nov 2, 2003
    Location:
    Florida Pan Handle
    Proceed with caution.
    Yet proceed - because sometimes good things DO happen for good people. Aristotle was a firm believer that luck has a lot to do with how our lives unfold. This sounds like it could be an wonderful unfolding for yours.
    Good Luck - God Bless you and your wife.
     
  16. Daybird that kind of deals happen all the time. Most people are programed to doubt good fortune so they overlook true opportunities. In a worst case scenero you get experience and are reimbursed for your work and improvements. Best Case you have your new home. SURE do your homework but take advantage of the good fortune that blessed you.






    -----> Jean
     
  17. barefoot gal

    barefoot gal Member

    Messages:
    19
    Joined:
    Jun 29, 2004
    Daybird, Check if realtor and/or county has a copy of a previous survey. If so, it will indicate how the corners were marked - iron rod, iron pipe, pile of stones, large tree .... I, personally, don't feel a pile of rocks or tree is definative enough, but a rod or pipe is pretty sure. Survey (on paper) will also tell you how long each straight line is and how far off a direction (N-S-E-W) the line runs. Knowing the length of your stride will help you measure from point A to B. A good compass will help you determine which way to go from point A to find point B. Make sure to take some surveyor's tape (from hardware store) or bright color rags so you can mark corners and make it easier to find them again. Expect the realtor to help you with this. Some realtors will be prepared (I haven't sold real estate for 7 years and still keep surveyor's tape in my glove box) and some realtors need to stick with selling little lots in town. If you find the property was surveyed (in you lifetime) but can't find the corners with or without the realtor's help, you still have something. Call the surveyor who did the work and ask them to re-mark the corners. Saves big bucks over the cost of a whole new survey!

    If you can't find any record of a previous survey, you can usually save yourself some money by using a surveyor who has surveyed one or more of the adjoining properties.

    RE: Liens County Recorder of Deeds will have most records (another office in my county handles mechanics liens). Title search which will be done if you get title insurance (do get it) should uncover any liens.

    Best of luck!!!! Wish I could be there to tromp the woods and weeds with you to find corners.
     
  18. RAC

    RAC Guest

    The best a real estate agent can do is maybe give you an idea of the boundaries--they are not surveyors, not zoning department people, not lawyers. It really is up to you to do all of the checking out of these things yourself, and these things sometimes cost money. The agent can certainly direct you to the proper offices, but there's a reason you sign papers that say "information deemed reliable but not accurate", and also, "if you need legal advice, please see an attorney" in those states where lawyers are not, as a rule, involved in property sales at all. They are "weasel clauses", designed to let them out of any possible misrepresentation issues.

    And be mindful of the fact that what you seem to be talking about here is a tax (government) foreclosed house. No guarantees on any representations--it really is "buyer beware".

    Hope things work out for you here.
     
  19. shakeytails in KY

    shakeytails in KY Well-Known Member

    Messages:
    204
    Joined:
    May 11, 2002
    I would proceed with great caution. It does sound like a great deal. This is not the time to get cheap, though- pay a real estate lawyer to thouroughly investigate and look after your interests. Title insurance is a must. Is it financially possible for you to buy this place and let it sit until after the right of redemption date, just in case? It would really suck if you got settled in and somehow the former owner showed up with enough money to take it back.
     
  20. goatlady

    goatlady Well-Known Member Supporter

    Messages:
    1,731
    Joined:
    May 31, 2002
    Location:
    No. Cent. AR
    Title insurance does NOT protect you from leins - what is does is give you a list of every RECORDED lein of record on the property so you know in advance what is leined on the property and must be paid off for you to own it free and clear. The title company physically goes to the courthouse and checks all the recordings against that property. THe insurance comes in if the Title Company misses a lein that is recorded - they have to pay it. There may be UNRECORDED leins outstanding but those are hard to enforce. You should have a copy of the title insurance BEFORE you close on the purchase of the property and the bank that issues you a mortgage will probably make sure all leins are paid to the bank is in 1st lein position - they get first dibs on the property in case of default on the mortgage. The leins usually include property taxes due and owing, mortgages, builders leins, etc.