Buyer says there's a lien on my home, the courthouse says there isn't. Help!!!

[whenwillthisend]

What is the name of your state (only U.S. law)? Indiana

I put my house up for sale and signed a contract with a buyer not long after. After a couple of weeks the buyer said that there is a lien on my home. The courthouse says there's no lien and my calls to banks and oldd credit card companies confirm that there's no lien. I've asked the buyer to provide proof of a lien but they ignore my requests and have provided me absolutely NOTHING to support their seemingly bogus claim. The contract has been signed by all parties but because of this supposed lien we've been in limbo for more than 30 days with no end in sight. The courthouse and my searches say there's no lien and the buyer refuses to provide proof. What can I do? This is so ridiculous that I'm wondering if this is some kind of elaborate scam. IS this a known scam? I ddon't know what they gain from us not closing within the 60 days stated on the contract but this seems awfully bizarre. The buyer is a "wholesaler" who buys houses for " local mass-purchase investors" by the way.

 

[STEPHAN]

You don't use a title company for the transaction? They would do a title search including the leans.

I suspect the "buyer" is just trying to buy time until he finds somebody who buys the property from him (he will assign the contract).

Were you in such a problem that you needed him?

 

[quincy]

What is the name of your state (only U.S. law)? Indiana

I put my house up for sale and signed a contract with a buyer not long after. After a couple of weeks the buyer said that there is a lien on my home. The courthouse says there's no lien and my calls to banks and oldd credit card companies confirm that there's no lien. I've asked the buyer to provide proof of a lien but they ignore my requests and have provided me absolutely NOTHING to support their seemingly bogus claim. The contract has been signed by all parties but because of this supposed lien we've been in limbo for more than 30 days with no end in sight. The courthouse and my searches say there's no lien and the buyer refuses to provide proof. What can I do? This is so ridiculous that I'm wondering if this is some kind of elaborate scam. IS this a known scam? I ddon't know what they gain from us not closing within the 60 days stated on the contract but this seems awfully bizarre. The buyer is a "wholesaler" who buys houses for " local mass-purchase investors" by the way.

I know of no scam that involves a buyer claiming there is a lien on property.

Here are two links to information on Indiana title searches:

http://www.in.gov/idoi/2608.htm

http://indianalandtitle.org/indiana-consumer-faq/

You are selling the property by yourself? You might benefit from having an attorney. Good luck.

 

[whenwillthisend]

You don't use a title company for the transaction? They would do a title search including the leans.

I suspect the "buyer" is just trying to buy time until he finds somebody who buys the property from him (he will assign the contract).

Were you in such a problem that you needed him?

After all parties signed the contract the buyer asked me to give him the keys to the house so he could "bring in buyers and see who is interested in buying the house". That was an insane request IMO so of course I refused to give him the keys to my house before we closed. The contract says that we would close within 60 days so if when the title search comes up clear isn't the buyer legally obligated to buy the property?

 

[quincy]

After all parties signed the contract the buyer asked me to give him the keys to the house so he could "bring in buyers and see who is interested in buying the house". That was an insane request IMO so of course I refused to give him the keys to my house before we closed. The contract says that we would close within 60 days so if when the title search comes up clear isn't the buyer legally obligated to buy the property?

It depends on the contract and any contingencies in the contract whether there is a legal obligation to purchase the home. You have ordered a title search of the property, then?

I am not sure why you are reluctant to have the purchaser take someone else through the home before closing. Pre-closing inspections are often done. And you could accompany the purchaser if for some reason you have concerns.

 

[STEPHAN]

It all depends upon the contract.

Who provided the contract?

How much is the deposit?

 

[justalayman]

STEPHANKOENIG;3305338]You don't use a title company for the transaction? They would do a title search including the leans.

I think leans are more of an engineers area of expertise while liens are the title company's area.

 

[whenwillthisend]

I went with this buyer because I was eager to sell the house "soon". I've seen homes for sale that were on the market for years and I didn't want that. This guy contacted me a couple of weeks after I listed the house without interest from any other buyers. Even though his offer was lower than what is appropriate I'd rather sell it for less than I want and move out soon, than leave it on the market and be stuck here for years. I bought it in a city I've never been to before and it turns out I really don't like it here.

The wholesaler guy gave me a contract to sign and it said I had to pay all the closing costs which came to almost 2k for a house that's selling for less than 20k. What a rip off. I didn't pay anything however so I'm not sure how he got any info about a lien when I assume the title search hasn't been done because I never paid for it. There was no deposit.

The wholesaler guy did a walkthrough and took plenty of photos before calling me back and saying he wanted to buy it. The people he wanted clomping through my house pre-sale weren't inspectors, they were potential investors and I don't think that's appropriate. Do you? If he's the buyer then selling the house after purchase is his job and should be worked on after he buys it from me, not while I'm still living in it. Do you agree?

I will call title companies tomorrow and get a search done. I'll also have to ask for another copy of the contract but I believe it said that if one party backe out the other party could keep any money in escrow AND sue. I'll let you know after I get another copy of it.

 

[quincy]

I went with this buyer because I was eager to sell the house "soon". ...

... The wholesaler guy gave me a contract to sign and it said I had to pay all the closing costs which came to almost 2k for a house that's selling for less than 20k ... There was no deposit. ...

... If he's the buyer then selling the house after purchase is his job and should be worked on after he buys it from me, not while I'm still living in it. Do you agree?

I will call title companies tomorrow and get a search done. I'll also have to ask for another copy of the contract but I believe it said that if one party backe out the other party could keep any money in escrow AND sue. I'll let you know after I get another copy of it.

You signed the contract but the buyer did not make a deposit to hold the home during the sales process? So there is no escrow money?

I understand better your reluctance to turn your keys over to the fellow. I wasn't aware that this was a house you still lived in. Because that is the case, I would say you should NOT hand over the keys to the guy and, if you are the only one showing the home, you should not allow multiple people to accompany the guy through the home.

I think you needed, and still need, a professional to handle this sale for you, whenwillthisend. I question the motives of your buyer.

 

[STEPHAN]

You really have 2 options:

If you trust the buyer, you go with him all the way. Buying from you at a discount because you are "stressed" and selling before he owns it, is what wholesalers do all the time. So the easier you make it for him, the sooner you have you money.

Or you find a professional realtor who knows what he is doing.

Don't take it personal, but so far you made some big mistakes and it looks like you do not know what you are doing.

 

[whenwillthisend]

I ordered a title search and it turns out that there is a lien on the house from a PREVIOUS owner! This lien has NOTHING to do with me! The title search gentleman was very nice and very helpful. He seemed to actually feel sorry for me too. I don't understand how the house was sold to me by a licensed local broker when there is a lien on it. I hated the broker because she was a horrible broker and individual. Working with her was one of those hopefully-this-will-never-happen-to-me-again kind of situations, so bad that I called the Indiana Board of Realtors to file a formal complaint about her when the transaction was finally over. But anyway, Ms. Rude Angry And Unresponsive is a licensed local broker so all that was supposed to be done was done - title search, etc. I know because I had to pay for it. But despite that I'm barred from selling my house because there is a lien on it but the house was sold to me with a lien on it. There are so many people at fault here but NO ONE is going to want to take responsibility. So now I need a lawyer.

 

[STEPHAN]

The broker does not have anything to do with the lien. Sometimes people are not aware of a lien. Thats why you have a title company and title insurance.

I just bought a house from a bank with free and clear title and 4 weeks later when refinancing (when the renovation was done) we found an old lien from the city. However that is what a title insurance will cover.

So the key question is: Did you have title insurance? If yes, they should cover it. But if you used a title company now for the search, they can help you with the claim.


(And just for the record, I learned how to spell lien.)

 

[whenwillthisend]

The title search guy said I had to get a lawyer. The way he talked this was going to be a really intense legal battle. But you say I'm covered by simple title insurance? Great! Now to find out if that was in the closing costs. According to Google it should have been so maybe this will work out well for me. I'll update this again ASAP. Thanks for your help thus far.

 

[STEPHAN]

Just to clarify: I am talking about the title insurance when you bought the property.

 

[justalayman]

Just to clarify: I am talking about the title insurance when you bought the property.

and to be more specific;

a buyers title policy as opposed to a lenders policy, which is often times the only insurance purchased. The lender knows what they are doing so they often insist on a policy that pays them if need be. A buyers policy sometimes gets ignored.