Recently a seller became entangled in an unfortunate mess that could have been avoided simply by getting some guidance from a trustworthy professional real estate advisor. This property owner had sold a large parcel of land with an owner contract. After several years the purchaser started struggling with the payments and then completely quit making payments. The seller was forced to foreclose in order to protect their interests. Instead they were advised to take the easier and less expensive method to take the property back. They accepted a "note in lieu of foreclosure", which simply means that the buyer signed the deed back over to the seller to avoid the foreclosure on their record.

The problem with using this simple legal maneuver was that the seller neglected to have a title search done prior to accepting the property back. Their yielding to incompetent suggestions would come back to haunt them! They were totally unaware that the buyer had encumbered the property with hundreds of thousands of dollars in junior liens, which a title search would have discovered. The more lengthy and costly foreclosure process would have wiped the slate clean and seller would have had the property back, free of all other encumbrances. They were unaware of this issue until a cash buyer came along years later and a title search was done. Now they are forced to pay off this huge liability prior to closing. That is an expensive mistake!

In another case a buyer purchased a property and paid dutifully until it was paid in full. Since they bought the property without the assistance of any real estate professionals, they were unaware of the fact that they would need a fulfillment deed from the previous owner to prove they had paid it off. Now, this owner is trying to complete a sale on that property but cannot clear the title from the previous lien because the seller is dead and their heirs are scattered all over the county. To resolve this issue the seller is forced to do an expensive "quiet title action" which takes many months, or to find each of the heirs and have them sign a fulfillment deed.

These types of stressful and expensive problems can easily be avoided with some simple precautionary steps. Consult with a professional before you start down that road in order to avoid these pitfalls!