Thread: The Low-Down on Listing Home Inspection Costs

I read this article and thought to myself I would be a mad moth#* $%^&#* if it happened to me. Somebody should of know about the lien and been accountable. Am I off base on this?
Real Estate Q&A - The Low-Down on Listing Home Inspection Costs | RISMedia

Similar Threads:

• HWA Launches First National, Licensed Home Inspection Warranty Program - RisMedia.com
• Pre-Listing Inspections
• County officials to review home inspection program - Fredericksburg.com
• Inspection vital when selling second home - Mortage 101
• Plaintiffs claim homes poorly constructed, sue for repair costs - Merced Sun-Star

He should go after the listing agent for listing a home without all the owners signed on to the sales contract...

He could even have alot more like Breach of contract.

Best

Ron

I think the same thing Rob. As you read, a Realtor answered to cover it up as nothing was there fault.

The agent should have asked the question. However, a lien would not necessarily come up until there was a title search. The owner should have disclosed it. I think the seller would be the one to go after. You cannot have a lien filed against a property without someone knowing about it.

I cannot really imagine what kind of lien it could be that would be by a "lover".

I sent the following to them, but do not see it anywhere there.

Guess they just want replies and then do nothing with them?

The answer really is “Yes, the listing agent should be held responsible for all costs involved related to a house which was not suitable for listing in the first place. The only way to get real estate agents to do their job sometimes is to hit them where it hurts – in the wallet.

That house should never have been listed, or, if listed, the liens should have been identified before the first offer was accepted – that failure is on the real estate agent as they should do a check first to make sure the house is merchantable before listing it for sale. The listing agent could, and should, have stated to all potential buyers something to the effect of: “We have listed this house, however, we are NOT accepting any offers until the status of any liens has been identified.” Had the listing agent done that, you would have looked at the house, but not presented an offer (or if you insisted on presenting an offer, the offer should not have been accepted) until the status of any liens has been identified.

There is an easy solution to the problem, deduct the lien amount from the sale amount prior to the owner receiving any monies, this lien amount can then bond the lien off the property (clearing the title for your purchase and closing) and setting the lien amount aside for future resolution of the lien between those two parties.

It is not uncommon to bond a lien off a property to clear the title, the money is now set aside for the lien, who gets the money now becomes its own legal matter. This is done for construction liens regularly and there should not be any problem doing so for another type of lien, such as you are describing. The main thing the lien is for is to ensure there is the stated amount of money available to satisfy the lien for the lien holder. Having that as “cash in escrow” would likely be satisfactory to the lien holder over holding a lien on a property which is depreciating and is in disrepair.

The above said, though, do you really want the property with all those things wrong with it, and with the potential for hidden damages from those items.

The Lover Lien could be tax related or most likely a bad debt.

I think that the owner and the agent should both be held accountable for the fees as they were both involved in the marketing of a home for sale, that did not have a clear title and with undisclosed problems.

This would fall I would think under the agents E&O.

This is my first post.
In California, it is possible to get a preliminary title run in 48 hours or less, assuming the Realtor has a good relationship with a title company. Assuming the buyer was represented by an agent, too, either could have requested the PR. The prelim should have been run, either at the time of the listing or before the inspections were ordered. Buyer was let down by both agents.
From the article, it sounds as if there is no equity that can be used to bond around the lien. As such, Jerry's suggestion may not fly (that is, from my observation, a rare event). But, the "lover" is most likely on the loan. As such, there is an incentive for the lienholder to release the lien in exchange for getting off the loan before a foreclosure can impact his credit. Someone should have explained this to the lienholder-lover.
In my opinion, the buyer should file a complaint with the agents' brokers for negligence stemming from the failure to run the prelim title.
Also, for the depth of inspections, it sounds as if the buyer got a lot for just a little. Eight hundred dollars doesn't seem like much for that much study.
Gary

Originally Posted by gary gramling

From the article, it sounds as if there is no equity that can be used to bond around the lien. As such, Jerry's suggestion may not fly (that is, from my observation, a rare event).

Gary,

That is where short sales come in.

Banks unload properties as less than the mortgage amount, takes effort and lots of work, but banks all over are doing it.

If the bank want to sell the property (let us presume the bank owns it, although that is not specified), it would be in the banks interest to bond the lien and clear the title, then sell the house as what they can get for it.

The amount used to bond the lien is written off just like the reduction for the short sale is written off, but at least it would allow the bank to dispose of that property.

Now, though, let us presume there is some equity, for the sake of argument, just enough to bond the lien off, the owner would then walk away with nothing, which is better than being foreclosed on.

However, there could be enough equity to cover the lien and extra, either way, though, the same process works - bond the lien off and clear the title - that is the only way they will be able to sell that house, so it simply must be done one way or another.

I would not make the presumption that the lien holder "lover" is on the loan, but that the lien holder "lover" has equity in the house. If the house is selling for more than the mortgage, they want their share of that equity. If the house is selling as a short sale as presumed above, there is no equity, they get nothing either, just like the owner - everyone walks away empty handed ... as happens so many times in this economic recession.

There simply is not enough information given to make any presumptions on anything, other than the lien needs to go away to clear the title so the house can be sold, and bonding the lien off will do that.

You are absolutely correct about not having enough information!

The banks that I've seen doing short sales are taking a hard approach to paying costs and liens. One, last week, refused to pay HOA fees that have accumulated during the six months their internal negotiator took to respond to an offer. Based on that, I don't see the bank bonding around the lien. To get rid of it, they would just foreclose.

We have to assume that the property did not go through a foreclosure, yet, as that would have wiped out the "lover's" lien. He could not have filed it after a foreclosure because he would, then, be a stranger to the title. So, it is either a "traditional" sale (doubtful) or a short sale.

Either way, the real question is how do we get the "buyer" reimbursed. I still say to go after the agents, just as you said. That's why they have E & O coverage.

Originally Posted by gary gramling

I don't see the bank bonding around the lien. To get rid of it, they would just foreclose.

We have to assume that the property did not go through a foreclosure, yet, as that would have wiped out the "lover's" lien.

Foreclosure does not wipe out a lien.

Foreclosure simply gives the bank the house, and the option to of 'first refusal', if you will, toward all liens.

The mortgage is the primary lien so the mortgage company gets first short at it, the other liens are still attached to the property.

Foreclosure is not like bankruptcy which can wipe out all debts if the judge says so.

"A week later the Realtor called and said the whole thing is a no go as there is a lien against the house caused by a former lover of the owner. This person’s name is also still on the deed. The owner has no money to pay off this lien and there will be no proceeds to pay it either."

The Former Lover also seems to be a co-owner of the property. The article also implies that there is little or no equity.

$800 for three inspections seems awfully cheap.

Even after they clear up the legal mess with the former lover/co-owner, they still need to determine the cost to repair all the defects. Unless the price is super, it seems like a different property would be a better choice.

Originally Posted by gary gramling

You are absolutely correct about not having enough information!

The banks that I've seen doing short sales are taking a hard approach to paying costs and liens. One, last week, refused to pay HOA fees that have accumulated during the six months their internal negotiator took to respond to an offer. Based on that, I don't see the bank bonding around the lien. To get rid of it, they would just foreclose.

We have to assume that the property did not go through a foreclosure, yet, as that would have wiped out the "lover's" lien. He could not have filed it after a foreclosure because he would, then, be a stranger to the title. So, it is either a "traditional" sale (doubtful) or a short sale.

Either way, the real question is how do we get the "buyer" reimbursed. I still say to go after the agents, just as you said. That's why they have E & O coverage.

E&O is not going to pay for anything. That is not why Realtors have E&O. Their deductible is more than likely far greater than an inspection fee or 2 or three or 4. It is not the agents responsibility to disclose anything that they do not know about anyway. After all how could an agent possibly know of a lean against a home if no one else knows anything about it.

Besides. I have E&O and that is certainly not what it is for. The only reason I have it is because the state says we must.

Now, what can happen is you put a lean on the home and get paid after everyone else does. After all it is the sellers responsibility to know if there are leans on their home not anyone Else's.

In California, the foreclosure would wipe out the lien. Florida could be different. The obligation would still exist in California; but, it would no longer be enforceable against the property. A bankruptcy could then be used to eliminate the obligation.

Originally Posted by Ted Menelly

E&O is not going to pay for anything. That is not why Realtors have E&O. Their deductible is more than likely far greater than an inspection fee or 2 or three or 4. It is not the agents responsibility to disclose anything that they do not know about anyway. After all how could an agent possibly know of a lean against a home if no one else knows anything about it.

Besides. I have E&O and that is certainly not what it is for. The only reason I have it is because the state says we must.

Now, what can happen is you put a lean on the home and get paid after everyone else does. After all it is the sellers responsibility to know if there are leans on their home not anyone Else's.

Most agents have E&O with a $1,000 deductible and many brokers carry a $5,000 deductible. Most state mandate that real estate agents have it.

While it might be true that the E&O would not pay it and that it would come out of the deductible, this is what E&O is for. Based on what I have read, the agent was professionally negligent in their actions and representation of the owner, the buyer and the property.

Our E&O is the same. If we are professionally negligent in our job performance then our E&O will protect us in the event of a lawsuit or even a demand letter.