A few years ago, a property owner became entangled in a legal mess that could have been avoided simply by getting guidance from a professional real estate advisor. They had sold a parcel of land with an owner contract in a “do-it-yourself” deal. After several years, the purchaser began struggling to make payments and then completely stopped sending them. Without seeking legal advice, the seller decided to start the process of taking the property back. They chose the easier and less expensive method by accepting a “deed in lieu of foreclosure,” which simply means that the buyer signed the deed back over to the seller to avoid foreclosure on their record.
The problem with this simple legal maneuver was that the seller neglected to have a title search done prior to accepting the property back. Their desire to take the easy route would come back to haunt them. They were completely unaware that the buyer had encumbered the property with hundreds of thousands of dollars in junior liens, something a title search would have uncovered. The more lengthy and costly foreclosure process would have wiped the slate clean, and the seller would have regained the property free of all other encumbrances. This problem went undiscovered until they sold the property years later. During that sale, a title search revealed the troublesome liens. They were forced to pay off this significant liability prior to closing. What an expensive mistake!
In another local case, a couple purchased some acreage from a neighbor in another “do-it-yourself” deal. In this initial transaction, the seller did not create an access easement for the property. Because the buyers lived next door, they did not think they needed one, as they could access it from their adjoining property. About 15 years later, life circumstances changed, and the couple went their separate ways. In the divorce, one spouse was awarded the property, which had no legal access. Now unable to access it from the adjoining property, this owner was left without legal access. The solution was either to sell the property at a discount due to the lack of access and let the new owner deal with the problem, or to pay a neighbor a hefty price for an access easement.
Cutting corners can lead to expensive problems later, which can easily be avoided with some simple precautionary steps. Consult a real estate professional before starting down that road in order to avoid such pitfalls.