The Story of Persistent Buyers.
Posted by: kateg 5 years ago
Behind every real estate transaction there's a story. For this transaction, the story was a great reminder if you want something in life, to not give up until you succeed.
Earlier this year, clients (and good friends!) of ours decided they wanted to purchase a cabin in San Diego County as a weekend home. After finding a number of “suitable” properties, we identified a property on Volcan Mountain in Julian.
The property on Volcan Mountain (known as 0 Volcan Rd), was 10 Acres of secluded land where a cabin had burned down in the Cedar Fire. Our clients fell in love.
When we did preliminary research prior to writing an offer, we noticed that the property had recently changed ownership, and that the original list price was $125,000, but was now listed at $150,000, which we found peculiar.
After a month of negotiations, we found out that the Seller was an attorney who had taken the land back as payment for a debt. When he took ownership of the land, there were delinquent property taxes due, and once he paid the delinquent taxes, he raised the listing price.
We later found out that the Seller actually only owned 85% of the property and he had no way to contact the 15% owners.
At this point, we were substantially apart on price, and had some philosophical differences regarding how the Seller should deal with the remaining 15% owners (his plan was to litigate and foreclose, and we didn’t feel comfortable with that).
Nevertheless, our clients didn’t lose hope. In fact, since we had the Preliminary Title Report, they were able to contact the 15% owners of the property, who were the 3 sons of the previous 85% owner. They each owned 5% of the property and didn’t even know it!
Ultimately, the 15% owners agreed to sell their portion of the land, provided we were able to come to terms on the 85% owner.
In an effort to protect the 15% owners, we decided to keep that transaction confidential. Our concern was the 85% Owner would pursue the 15% owners in court for the delinquent property taxes, if he had an easy way to contact them.
Therefore, while we were negotiating with the 85% owner, we included in the contract that we were buying all past and future claims that the present 85% owner had against the 15% owner, knowing we would never pursue any of those claims.
Ultimately, we were able to successfully negotiate an agreeable purchase agreement with both owners and (after jumping many more hurdles), successfully closed both transactions simultaneously, whereby all parties got what they wanted: our clients owned 100% of the land they fell in love with; the 15% owners received a small payment for land they didn’t know they owned; and the 85% owner was made whole from the original debt that procured his ownership of the land.
None of this would have happened if our clients weren’t persistent and didn’t lose hope, no matter how trying the transaction was.
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