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REALTORs® Step up to the plate for your clients!...Don't rely on your Title agent to check for any open permits...check yourself!

Tue, Feb 21, 2012 at 10:35AM

I've been a Realtor® for more than 15 yrs. I mainly list properties so I try to make sure that I cover all the bases regarding the Real Estate part of the transaction. You might be wondering what I mean by that. For example...during the process from contract to closing...I have to make sure that everything is moving a long on my end. I try not to step on any ones toes so I'll usually take a step back when it comes to the other parties involved. I have to be pretty confident that they will do their part and stay focused. Unfortunately there are times when other people get lazy and let things fall through the cracks and then at the 12th hour I find out that these issues could have been addressed at a much earlier date. When that happens...then we all have to scramble to make sure we meet our deadlines. I've seen a lot of mistakes and issues in my career and I'm sure a long the way I could question whether or not I could have done something different. It's a learning process and no matter how many years of experience you might have...there will always be something new that pops up. This is a two part story....recently on two consecutive closings...I ran across similar issues with both of them. Below...I will explain. The first one went this way...

  • Client number 1 - Seller employed me as their listing agent. The property was a Trust sale as the parent was deceased since 2003. The owner's son was the trustee and lives out of state and from what I was told...he never has been to the property. There was a lot of leg work I needed to do first before I could even put it up for sale. There was a tenant that needed to be evicted due to not paying rent for several months and was not responding in any way. The property was left in terrible condition so I made arrangements to have some things repaired.

Once I put the property up for sale....we had a buyer within 30 days. We had a closing date that was met but about 2 weeks before the closing was to occur...the title agent ran across 3 open permits. Most title companies won't check for open permits and liens until a few weeks before a closing...some won't check until a few days before the closing. I think they wait just in case the deal falls through and they aren't out the time and money they have to put up front for these searches. Because the client was from out of state...I was the only one who would be able to take care of this so I did. Two of the open permits were fairly easy to remedy. All I had to do was drive an hour out of my way and meet with the head building inspector and he assured me they would reinspect the next day. I did have to pay a few hundred dollars up front but my client gladly reimbursed me. The third one was a bit of a problem because it was more complex and didn't pass the original inspection due to mechanical failure and a no access into the property. These open permits were from 2003 and back then these inspectors didn't have a system with notes so there wasn't muh information as to the exact reason it didn't pass. the only thing I could find out was that an A/C unit failed 3 inspections and the original contractor went out of business. My dilemma on this was that we needed to close in a few days and it was right around the holidays. My only solution was to escrow an estimate of all the costs..close on the property and take care of the permits in 2011. As of yesterday...the book is closed on this property and it all worked out...the remaining escrow was released to the owners son and he was happy.

  • Client number 2 - I was hired by the seller to list the property as a short sale. In the state of Florida...when you purchase a home...you hire a title company to do their work...run all their searches to assure a clear title and they issue you title insurance. The seller had purchased this property about 10 yrs ago and at that time they assumed there wasn't any liens or open permits. Unfortunately this particular transaction was a bit more complex. So we go through the short sale process and we get the approval. This also happened right before new years. The process from contract to closing actually took about 4 months which isn't so bad for a short sale these days. But a weeks before the closing the title agent contacted me to let me know they found an open permit that went back 14 yrs!

Yes ...that's right...before the seller purchased the property!...there was an open permit for a faulty fuse for the alarm system! Although this was pretty bogus in my mind...the last title company closed with the outstanding permit still intact! All I know was we only had a few days to close on this with the lender. And with the buyers deadline and he holidays approaching...we didn't have time to chase the prior title company down or get a hold of the underwriter.And there was no time to get the HUD changed so we couldn't hold any escrow. It was finally settled with the building department just in time and we closed. In the end...it was pretty obvious that this title company didn't do their job properly. I've actually had another seller in the past that was sold a property with a cloud on the title and had difficulty closing and more time was wasted hunting down the prior title agent to clear it up. This is why we pa for title insurance. If it needs to be cleared...the prior agent must clear it for free. The moral to this story is that I think as a Realtor®...we need to check these things out ourselves way before the transaction is to close. This way if we had more time...we wouldn't have had to scramble at the last minute. It isn't a very difficult task to accomplish. All you need to do is look up the address and the record at your local building department. Step up to the plate for your clients and for yourself! For the superior service that you deserve!

For more information ....Please contact Neal Bloom-Realtor® /Keller Williams Properties   Weston Realtor(R) Neal Bloom-copyright 2007 1625 N. Commerce Parkway,Suite 105 Weston FL 33326 (954)608-5556 Neal Bloom tells it Like it is in Real Estate-copyright © 2011-All rights reserved Page copy protected against web site content infringement by Copyscape

Neal Bloom

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