In going through Richard's transactions with Andrew Allen I want to point out a few things that OZ investor should keep in their Quiver of Knowledge: Cheeves as your the only other licensed broker I know on the forum would you chime in on Florida law.
Topics below:
Sellers disclosures that are mandated by state law:
Apprasials: The right way to order them and protect yourself.
Closing Attornies: who do they represent
Title co: who do they represent.
In most states it is the LAW that the Seller has to present you with a written property disclosure statement prior to settlement… Now lenders and banks are exempt if its a foreclosure… And there is exemptions for new construction and every state is different on this.
However its one of the reasons if your using an OZ company they probably do not really know all the Laws relating to disclosures… On the West coast though I know were I am a licensed broker in CA OR WA and licensed in Mississippi … its mandatory and the remedies to the buyer are numerous and can include a full recision of the contract even after closing…
Just because the house is non owner occuppied or was bought at foreclosure property disclosure statement still needs to be presented and signed off by the buyer and seller…there is enough teeth in this Rule of law that an attorney can fire off a letter to the seller that will have them come to attention and probaby negotiate something out. There is no Defense for a Seller that by law was suppose to present you a property disclosure statement and did not do so… Another words you got em.
Agian these are state specific but its also a good reason to either work with a reputable RE broker or at least make that inquiry so you can get the info for free… And if you end up with a pear shaped property and no disclosure was given to you, you definatly have grounds to go back after the TRUE SELLER, not the marketing guys your OZ marketing companies are Teflon no one is going to get anything out of them.. Who ever signed on the Deed transfering your title…. So thats one of the first things Richard should look into on his Detroit and Youngstown Pear shape deals…Look up on line or contact a reputable RE broker and just ask them… Anyone who does any amount of RE will know this imediatly…. And since the majority of these transactions the OZ investor is participating in is done without the benefit of the US Broker the sellers may or may not even know that its required.
I will post a copy of our Oregon Disclosure forms so you can familarize yourself for the questions you should be asking.
What I see in the selling of these properties to the OZ investor is just a huge circle of FISBO's "what we call For SALE BUY OWNER" There is no verifications of values Obviously no up front disclosures because there has never been mention of it that I have seen on this site for the year I have been looking at it…. And just because your not a licensed Real Estate agent your not exempt from providing the buyer a Disclosure statement prior to Settlement.
Apprasials:
Here is another tidbit…. Apprasiers only work for the client who pays them… Any apprasials that a company is giving you look to see who the client is… For sure its not you the buyer unless your ordering it and paying for it… So there is no recourse against an appraiser…. Now you can request that the Apprasial company formerly ASSIGNS you the Apprasial and then you are the client and if something is not right in the values you have their E and O insurance to fall back on… Also when dealing with Apprasiers get a copy of their current E and O policy any legit apprasier is happy to provide this.
Closing Attornies and Title Companies: who do they represent.
They represent neither the Seller or the Buyer they are neutral escrow agents… Although in practice most wholesalers will use the same people over and over and there will be a general bias… however if your deal has problems there is not going to be any recourse against these neutral 3rd parties… If you need legal representation it needs to be from an attorney who is not closing the transaction.
Hope this helps you navigate the US Real Estate purchase process.
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