Hi guys! So I am new to this land investing journey as I started last summer. I’ve landed 1 deal, double closed. It was great! But unfortunately, my next 2 deals got stuck with the need for a quiet title suit which takes months. One parcel I’m sure is worth the wait but the other, not so much. The issue is that the property requires an aerobic system which is $10-$20K to install. I received an offer on the property which later backed out once they learned that this type of system is required.
I was told earlier on by 2 realtors that the property was worth $16K by one agent and the other said it would probably sell for more than that. But now I’m not so sure. I’m in it for $5,350.00 plus closing costs. I would like to sell this property on terms but I don’t want to close on it without a buyer and it looks like the quiet title suit will be over soon. Should I back out with the seller? Is it too late to due so? The Purchase Agreement does have contingencies built into it concerning the Buyer’s satisfactory due diligence. Any advice is appreciated. Thanks!
Lining up a buyer first for a property like that would be the smart play. The problem with inexpensive properties that require expensive upgrades is that it’s difficult to find a buyer who’s willing to put $20,000 into a $10,000 property.
Whether or not it’s time for you to cancel is kind of up to you. What if you were to just price the property in a way that you could get your money back and count this as a learning experience? How quickly do you think you could sell it?
@jt Thank you for your response. I think I should back out although, I feel pretty badly about doing so because I have had this property under contract for so long. I only held on due to the responses I received from the real estate agents I spoke with. And though I knew septic was required I did not realize the expense would be such a game changer and honestly should have given it more attention. Lesson learned. I really don’t want to take any chances on losing money at this point, so I am going to cancel. Thank you again for your input!
Hi guys! So I have decided to cancel the contract on the 1 acre parcel mentioned previously. I was told by the closing agent that due to the time that has elapsed, that now the abstract will have to be updated once the quiet title suit is complete. So far it has not been completed. Is it fair for me to offer to pay half of the attorney’s fees for the quiet title suit provided the seller did so with the intention of selling it to me? This is a solo journey so any advice is truly appreciated once again.
Side Note: When informing the seller that a quiet title suit would be necessary, I also told them that it would be at their expense because if it were to be at mine, then we would have to renegotiate the contract. But should I offer to pay anything simply for the sake of good business practices or to save face if possible? Thanks again for any and all input.
@carlam If your purchase contract stated that they would provide clear or marketable title, then it’s on them. Paying part is up to you (and them) as they could always back out and you’re not going to sue them. Staying on people’s good side is solid business practice. Getting to the closing table is the goal. Also on the quiet title…
Again no easy answer. every deal is different. Some folks would sell with a quit claim deed rather than insurable title. Especially on a terms sale where there is time to let it resolve itself. Like if there’s a 4 year statute and you’re already 2 years in? Folks buy tax deeds and sit on them all the time.
Lastly, sounds like you’re starting out with headaches. Some deals (to JT’s point) aren’t worth the trouble. There are easier deals ahead. Don’t get bogged down trying to make every one work.
@steve-hodgdon Thank you very much for your input. I likely will pay a portion of the attorney’s fees for the quiet title suit because it seems like the right thing to do. I agree with not getting bogged down with all of the duds. I am not understanding why there always seems to be something wrong with every property I get under contract. It’s usually an issue with there being wetlands, flooding, uneven terrain and sellers wanting way more than would make sense. I will keep chugging along. Thank you again for the insight!