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3 weird title problems real estate professionals face

On Behalf of | Nov 10, 2017 | Blog |

As someone in the real estate industry, you know that listing a property is usually fairly straightforward. Most of the time, you simply meet with the owners, negotiate with them and draft a listing agreement. Representing the owners throughout the listing process is generally easy. 

However, there are problems that may arise that muddy the waters and make things complicated. Read below for unusual title issues real estate professionals face. 

1. Deceased owner

The first issue, which we also cover in our video guide for title solutions, is when the owner has recently passed away. In this situation, you may meet with the executor of the estate. While this may make sense, it can cause problems if you do not verify this is the correct party. Does the executor have the responsibility to list and sell this property? 

2. Disabled owner

Another issue similar to the first one is if the owner is in a nursing home, and the son or daughter claims to have authority to list and sell the property. Before you move forward, find out if this person actually has this power. Unless the person has power of attorney or another estate planning designation, he or she is probably does not have the authority to make these decisions. 

3. Living trust property

At some point, you may encounter a beneficiary who inherited the property via a living trust. This person may claim to be a trustee. However, there may be multiple trustees. You must involve co-trustees if they exist. 

In all of these situations, if you are not careful, you could end up with a listing agreement that does not have the signatures of the rightful parties. This can lead to a myriad of issues when you try to close because you may not have any authority to sell the property. You should question the individual about his or her legal authority. If there are strange issues with executors, powers of attorney or trustees, you may also want to ask an estate planning attorney for guidance.