There are some important legal concerns when flipping houses, and among these is the title concern for the person that purchases the property initially and then attempt to sell it shortly after renovations complete. Some states have selling restrictions, others require more research and time to discover if there are any title complications.
It is with the Federal Housing Administration that restrictions complicate the reselling of a property. This happens primarily through the approved lenders that supply mortgages and home purchase loans. The restrictions limit the frequency with how a house is first bought and then resold to another party. This affects the ability to pass on the title from the property to another person for residential matters. The rule affects flipping and requires at least a 90 day wait period before the owner can sell the house once he or she buys it. The owner can sell them if the buyer does not need a mortgage or to go through the lenders, but both parties may need to check other
laws in the state.
If the house purchased has additional title problems, these issues may not appear at first glance. The new owner may need to proceed through various local and state processes before he or she can sell the house. These complications often appear with faulty or fraudulent titles, deeds of ownership from another party or a property abandoned but still legally owned by someone else that must relinquish a claim on the house or land. When attempting to flip the property, the new owner may need to hire a real estate lawyer to help proceed cautiously and remove obstacles.
When selling a property, some smaller towns or cities with places where homes have less legally settled titles may provide additional problems for a person attempting to flip a property. When title fraud or deed complications arise with multiple owners, it may require additional time and a lawyer to sort out the issues within the courts of the city. Some new buyers may require a survey of the land, an assessment of the property and a search within legal records for the title with the town authorities in the local department. A real estate lawyer may help with the problem and discover how to resolve it.
Whether the new buyer must progress through mortgage fraud, title fraud or real estate fraud with a real estate agent or broker, he or she may need to slow the progress of the flip and sale. It is important to discover what type of fraud is part of the local problem and how best to resolve the matter. Hiring a professional to research the fraud and deal with the sale is crucial to completing the process. This could lead to police involvement in criminal matters or civil court for litigation depending on the severity of the issue and how many have involvement in the fraud activity.
Who owns the home is an important matter that many that purchase the property may discover could affect the title purchase and the possibility of flipping the house. When starting out, the new buyer will often need to purchase title insurance to ensure he or she is the person buying the property with a clear ownership vested in the house or land. The buyer that wants to flip the house must have a valid title with a clear understanding of his or her ownership of the property. If any other owner appears, this could cause problems.
Various other processes are often necessary to complete the transaction in smaller towns.
The individual buying the property may need to speak to both a real estate agent and a real estate lawyer. Before the title clears for the buyer, he or she may need to assess, survey and analyze the land and deed documents. Some require a delineation of boundary lines while others have easements and other complications that prevent an immediate sale. If the true owner of the title is unclear, the buyer may need more time to unravel the mystery so there are fewer issues when he or she is ready to sell.
When attempting to flip a house, the buyer may need a real estate lawyer to help with the process. This assistance could range from helping find the title owner to understanding the complications about the property lines and how to sell the house or land.
Provided by HG.org