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With liens in the picture, get a tentative statement right now

Published Dec. 2, 2006

My daughter signed a contract to buy a townhouse. She has already paid for the inspection, appraisal and credit report, about $650 total. The real estate agent just informed her there are several liens against the title, and the sellers are having financial difficulties. She said they cannot pay off these liens until they receive the sale proceeds. The title insurer won't issue a title policy until the title is cleared. What happens next? Can the sale go through?

The seller liens can be paid off as part of that closing procedure, just the same as when an old mortgage is paid off with the proceeds of a sale.

It would be a smart idea for your daughter to ask for a tentative settlement statement now to be sure the seller will receive enough funds from her down payment and new mortgage to pay off the liens against the property.

Suppose, for example, that your daughter is paying $240,000 for the house, putting $15,000 down and obtaining a mortgage of $225,000. If the total liens exceed that $240,000 total - if the sellers owe even more money - unless they can pay the excess from other sources, then your daughter can cancel the sale and get her deposit refunded.

The title insurer should give your daughter a preliminary title report showing exactly which liens and their amounts must be paid off from the sales proceeds in order to convey marketable title to her. When the sale closes, she should purchase an owner's title policy for her protection.

Try saying please

My neighbor's vines and plants grow up and over my garage roof and my storage shed roof. I have to get up on a ladder twice a year to whack it down and cart off the debris. Any suggestions how I can get my neighbor to have his gardener remove his plant's growth from my property?

As with trees that grow beyond a property boundary, you have the legal right to cut the plants and vines back to the boundary.

But there is no law requiring the neighbor to cut the plants back to the lot line. Of course, you can politely ask your neighbor to periodically trim his vines and plants so they don't grow on your property.

No 'free look'

We put our home up for sale in early October. Within a week, we signed a sales contract with buyers. Eight days later, the buyers backed out, saying they changed their minds. We opted to keep their $2,500 earnest money deposit. But we discovered the next day the real estate agent never received the $2,500 stated in the contract. We believe we are owed this money but have been advised to forget it. Who is at fault for not actually collecting the $2,500? Should we try to collect it?

Shame on that real estate agent. Unless the real estate agent told you the $2,500 earnest money deposit stated in the sales contract had not been received from the buyers and deposited in the agent's trust account, that agent is clearly liable to you for the missing $2,500.

If she refuses to pay you the $2,500 promptly, take her to local Small Claims Court to obtain a judgment against her. There is no valid excuse for a real estate agent ever bringing you a purchase offer to accept and not informing you she hasn't received the $2,500 earnest money deposit stated in the contract.

Real estate purchase contracts do not include a "free look" allowing the buyer to back out eight days after the seller accepted the offer.

Of course, if there was a valid contingency clause, such as for the buyer to obtain a mortgage, that would be a legitimate reason to cancel if the buyer was rejected for a mortgage by several lenders. However, if the buyer never applied, then that escape clause can't be used.

Clear title now or later

You often suggest that when a husband dies, the widow should remove his name from the title. My mom, who lives in New York, is planning on staying in her house. Should she have my late father's name removed from the title?

The exact answer depends on how your mother and your late father held title.

In most states, if they held title as joint tenants with right of survivorship, or as tenants by the entireties, it is usually quite simple to remove the deceased owner's name from the title. All that is normally required is to record a certified copy of the death certificate and an affidavit of survivorship.

But there might be some complication with your mother's title. For example, if title was held as tenants in common, then your late father's half of the property usually requires probate court proceedings according to the terms of his will.

The reason to remove a deceased co-owner's name from the title now is to simplify matters when your mother either sells the property or when she dies. If this is not done now, while there is no urgency, the problem will eventually have to be confronted.

Send e-mail to Robert J. Bruss by visiting his Web site, Click on "Ask Bob a Real Estate Question.'' Or write to Robert J. Bruss, 251 Park Road, Burlingame, CA 94010.