People sometimes don't know what's going on with their properties.

I had asked the seller if there were any outstanding debts against the properties. She said no. "I own it outright."

We list the house and accept an offer.

We got the preliminary title report* as usual. In a couple of days I get a call from the escrow agent. "What about the $45,000 personal loan on the prelim?" I react, "huh?"  the escrow agent said, "We need a payoff demand. It looks like it's a personal loan. Can you get the contact information from the seller."

So I called the seller.
Me: "Do you know anything about this loan? It looks like it's 30 years old. It's owed to a man."
Seller: "That was a long time ago. Just tell them that debt no longer matters. Please."
Me: (Really?!) "That's not the way it works. The loan has to be paid off or the title company won't insure the property. The buying bank won't make the loan because banks don't lend on clouded titles. Do you know where the person is?
Seller: "No. He passed away a long time ago."
Me: "He's dead? Oh, no."

So I called the escrow agent.
Me: "Jamie, the person who made that loan has passed away."
Jamie: "You're gonna have to do a probate."
Me: " I knew you're were gonna say that."
Jamie: "I know a good probate lawyer."
Me: "Yeah, me too."

And that's how we ended up in a probate sale situation. Guess what? It''ll be a few months to resolve it. So the sale is cancelled. Oh, my.

Me: "What's this about defaulted property taxes? It says $10,114!"
Seller: "Really? I don't know anything about that."


* Preliminary Title Report: A report done by a title company before issuing title insurance coverage. The report shows the ownership of a specific property along with the liens and encumbrances that will be paid off and covered.

My friend, a realtor, told me that he and his client showed up to court on the sale date to overbid. He had called the listing agent and he was told that a personal check would do.

In my experience, you always take a cashier's check for 10% of the first overbid amount. I'm sure there are exceptions, but with a cashier's check there are no exceptions.

The original bidder did not show up. The judge said OK Mr. New Bidder, we'll take your offer but we need a cashier's check. Go to the nearest bank to get one. Up jumped the listing agent. Your honor, while he is getting the check, can we call the original buyer to see if he wants to bid up? Judge said OK. (Huh? Really?) 

The new bidder went to a bank and was delayed a little in getting the check. Finally he got the cashier's check. What happened next? He went back to court only to hear that they were trying to get a hold of the original buyer. (Huh? What?) Lo and behold, the original buyer does show up! (What?) Now there was competition and the original buyer beats him.

What's the lesson here? Take a cashier's check...always. Don't take it easy. Don't listen to the listing agent in this regard. What's he going to say when he screws up? "Sorry." And you and your client lose.