I have a screaming deal in the works with 3 owners who live in different areas. 2 out of state, in different states and 1 in PA..

This property stands to make me a tremendous amount of money not even changing the locks.

The assessed value is $180,000 and is higher than what the property is worth after rehab. I have them agreeing to $18,000 for the property.

The trouble is that the title company wants to alert them to the assessed value of the property because they will have to pay a state transfer tax of 1% on that value. Ok fine.

But, I need the title company to handle getting me the freaking sales agreement due to the owners being scattered across the US.

They are stalling out getting me the sales agreement due to wording this "disclosure" of sorts. I'm not sure if alerting the sellers to what the county has their property assessed at as part of the sales agreement is actual law/legal requirement or some sort of feel good moral obligation on part of the secretary at the title company.

I don't care if the seller's have sticker shock at the closing.

I want this thing under contract NOW! To the point that I'd fly to different states to collect these signatures if needed.

I've taken sales agreements in hand written on torn out pieces of spiral bound notebook paper before.

How can I take control of this without the seller's getting scared thinking their property is worth the super high county assessment value???

I echo what Tim said.

I have always produced the sales contract, had it signed and taken it to the Title Co. Use docusign to expedite the transaction.

Let me sort it out.

1. You have a verbal agreement from the 3 owners to sell you a house for $18,000 while the assessed value of this house is $180,000?

2. In my part of the country, a title company is not in the picture until escrow is opened, and escrow can't be opened until you have a signed DEPOSIT RECEIPT" signed by the sellers and the buyers.

Fred, #3 is totally off the mark. Buying a property drastically under market from a seller of sound mind is perfectly fine. Even more so with 3 sellers involved.

That's how we survive.

This isn't a mentally handicapped or elderly person.

I will call the title company in the AM and tell them to halt everything and I will get digital signatures somehow.

I think this is more of a moral high ground because they don't "understand" how someone could possibly buy at such discounts. I think the new secretary doesn't care much for me either. Oh well.

When I was buying a property from an estate, it consisted of 5 children that inherited the property. They were all over the country. I knew there would be issues, so "we" (the Title and Escrow Companies) did the following:

Hired a special Notary/messenger service who:

a) Over night mailed the documents to a "traveling" Notary Service in the local town.

b) Had the Notary schedule an appointment with the Estate Child to:

Review and explain teach document. Have it signed and notarized.

c) Send the documents back via over night mail directly to the title or escrow company.

Each Notary got $200. The overnight mail fee's each way were $25. So for $1,250 -- I got all documents signed and delivered within 3 or 4 days...

I've never heard of a title company involved prior to sales agreement being signed. Get the agreement in place before going to them.

If you had a realtor involved they would present a good faith estimate that would include an estimate of closing costs, maybe that is what the title company was doing?

Since the property is a screaming deal, you could have the 1% added to the contract price of 18k. Now the seller has no cost of transfer fee. You can now been seen as the good guy.

Why is the title company doing the contract?

Do you have standard contract you can use when you get off market deals?

The only reason I had the title company handling the sales agreement was because there are sellers located in different states and I wasn't sure how to approach it.

I will NEVER go to a title company or attorney with an verbal agreement on property again. If they had or may even have already informed the buyers of such a high county valuation of the property, the deal may be doomed.

Then NE will go tyrant mode. :)

I will email them now to stop everything regarding this sale until they hear from me. I will handle the sales agreement myself.

Ed, the Pa dept of Revenue who collects the transfer tax doesn't like the transfer tax taken on what the sales agreement says when its under a certain percentage of the assessed value.

If that were the case and these folks wanted 100k for the property and I was willing to pay that, I could pay them 82k cash and record a transaction of 18k. NOT HAPPENING!

I can (and have done in the past) appeal the transfer tax at closing by submitting an appraisal to the state with a transfer tax paid on the appraisal amount instead of the higher county assessment amount. The state doesn't like it and can push back on it, but I don't like them much either so we're good. HAHA.

However, it is LEGAL to appeal this and IT WORKS and sometimes the cost of the appraisal is justified, as in this case it would be.

NE PA,

You should have an independent appraiser give you a property analysis.

Fred, I will get an appraiser. The deal will happen if I can stay in control of it. I've bought with bigger disparities between purchase price and assessed value before.

Dodge, I hope that's a joke.

It's not my job to educate sellers on the value of their properties. It's my job to work to become the best investor I can be.

Do you pay full retail for all your properties? If not and you buy below retail, at what point do YOU cross from a discount to a rip off??

I sent them a postcard and they CALLED ME.

I can't think of anything I've bought in my life where I said, "oh no, that's too cheap, let me pay you more."

Haha.

Also Dodge, they had no asking price in mind when they showed me the house. I offered 18, they countered at 24k. I said no. We agreed to 18k. The high tax assessment came into play way after the fact. Also, if a realtor were to list this property as-is, it would probably list for 65-75k.

I have my doubts if this transaction will ever become reality.

You sent the owners a card, they replied, you offered them a low ball offer (much lower than what you admit could be the market price of 65-75K) and verbally agreed on a price, but now you can't get them to sign a DEPOSIT RECEIPT (SALES CONTRACT).

How will you get this verbal conversation enforced?

NE, I have been in real estate forever, and I've seen unbelievable "deals" in writing, stamped VOID after sellers signed, when the actual sales price was much much lower than MARKET VALUE, providing the house was standing and not destroyed by termites or a tornado..

Show me how you will get this thing done.

BTW, a judge will rule a "rip off" any deal written by an experienced RE person taking advantage of an innocent, dumb and uninformed owner. That's what the court will do, stand by the weak and the meek.

Just to clarify, I have done many deals like this before without this particular problem, i.e. great differences between purchase price and actual market value and assessment value. Some with greater differences than even this one. (hint:as investor's we want these types of deals)

To say its a rip off or won't happen, I believe is a short sighted or narrow vision perspective. Like a "you cant do that here" ideology. I've done it with much success and will continue doing it.

The actual problem here is not the sales price vs county price. The problem is getting this thing SIGNED with scattered owners. The other problem is not allowing the title company to disclose this in a way that educates the buyers. That is UNNECESSARY in this deal. That's not their job, nor my concern if sellers lose their a$$. They are at a state in their lives with this house that creates a deal for me.

If you don't like that perspective, too bad, keep overpaying for your properties.

This is how I feed my family and I wish I could score MORE deals like this.

So now its a matter of getting this agreement signed without the title company over stepping their bounds and saying something stupid to the sellers prior to the signed agreement that messes it up for me. (see original post)

If the sellers were local, I would have it signed already and well on its way to closing.

Also, if I do lose this deal at this point, I will 100% say that it is a result of the title company's actions.

Three sellers, in different states, we are to believe, are to liquidate their equitable holding for a fraction of what the deal would net them if they had it listed on the market? All 3 sellers are fine with settling for a substantial $ reduction just for expediency? I can believe 1 seller is naively unaware of what they may have to sell, but all 3 of em?

I can see how this could go either way. It likely not something that you want to get before a court.

Do you have to let the title co. handle this or could you get an atty. to do it, even if it costs a few dollars more.

NE, you don't have to close at a title company. Any competent real estate attorney can do a title search and prepare all the closing docs that you need.

I suspect the Title company notified the seller as a PYA move for the title company. Here part of "best practices' for realtors is to include the comps used to determine the selling price in the documents presented to the sellers and get their signatures on the comp documents. That way (as has happened) if the sellers come back latter and claim the property was sold for too low a price , you have documentation the sellers were informed when making the selling price decision.

I think the Title company has fiduciary responsibilities to everyone and presenting this information to the sellers is its way to shield the Title company from repercussions.

CGB MI

Yep, Title company did it because of fiduciary responsibilities to the seller....per article below Title company is combined agent for Buyer & Seller. If smoking deal , get Title company involved after the deal is under contract.

What Are the Duties & Roles of a Title Company?

NE investing 101-- keep your deals to yourself. Second have you thought maybe someone at the title company wants the property? 3rd non disclosure from the title people--- have your attorney call.

Now we are " getting what we deserve" by potentially losing deals when buying too low?

Ned, I hope your joking too.

Was joking. (see the :) )

As long as someone is not taking advantage of someone who is uneducated, elderly, or disabled.

(said differently...as long as both parties know exactly what they're doing... all's fair)