Florida couple stunned to learn $458,000 paid for gulf-front condo may be for nothing

[TexasTowelie]

On June 8, a condo overlooking the Gulf of Mexico in North Redington Beach sold at a Pinellas County foreclosure auction for $458,100.

The winning bidders, an Orlando couple, thought they had gotten a good deal on the 1,500-square unit in the Ram-Sea Condominiums with heated pool and Jacuzzi. Owners can use their condos as permanent homes or lucrative vacation rentals.

But the Orlando couple won't do either. After the electronic auction was over and the money paid, they made an alarming discovery: A bank has a superior first mortgage on the condo and could soon foreclose.

That would leave them with no condo and out almost half a million dollars.

Read more: http://www.tampabay.com/news/business/realestate/florida-couple-stunned-to-learn-458000-paid-for-gulffront-condo-may-be-for/2329213

[Sen. Walter Sobchak]

1. I used to work on bankruptcies

Amateur real estate investors represented a good chunk of the business for our bankruptcy practice.

[Warpy]

2. That would mean whoever offered the condo for sale didn't own it

and that means fraud and somebody will go to prison if the money isn't refunded.

I have a feeling they'll get most of their money back.

Then again, it's Florida. Lots of real estate shenanigans going on down there, none of them friendly to buyers.

[defacto7]

3. So did the couple decide to skip the full title search

before closing? That's what title companies and title insurance is for. Sounds like they screwed themselves by not taking the usual necessary precautions.

[csziggy]

4. They should have been able to search for information on mortgages

Most Florida counties have many of the current documents online. For instance, when we were thinking of moving I could look at properties on the Property Appraiser website for our county and from there follow back to the last sale or two. From that information there were often links to the sales and mortgage documentation.

Given the previous owner names, then you could search for liens and mortgages and often read the entire documents. Depending on the county and the property, much of the history of a property could be available. Leon County has all their documents online from the date they began digitizing and for some documents pre-dating that time if they have been pulled for court or other uses. The County Clerk is doing the same for official records.

Remember, Florida is a open records state and the Florida Sunshine Law opens almost every record to public view.

[defacto7]

5. That's what I've done in the past..

But for most people buying a property who don't search themselves the simple yet more expensive way is to get title insurance where the title company is responsible if they don't give you all the property backgound before you sign. They do the search and notify you if it has issues. If they say it's clear and something comes up afterward, it's their responsibility to cover losses. They don't want that to happen so you just end up paying the fee and you know what your getting or you can back out of the deal if it's got problems. It's better than getting stuck.

[csziggy]

6. With an online auction a title company may not have wanted to deal with it

Or had time for the research.

My Dad used to buy tax certificates on Florida property and he did all his own research at the courthouse - he stopped buying those things long before the world wide web got started but he did it for many years. I never helped him but he'd talk about the details he found and how he located the information so I was used to how the research was done decades ago.

When we purchased our farm we did our own title search though we still bought title insurance. The family we bought from had gotten it on tax certificates over thirty five years before. In Florida, after thirty five years a tax certificate deed cannot be challenged so we felt safe. At the time, one acre had been missed out of the tax certificate purchase and we tried to get it from the man who had purchased. He wasn't interested in selling at the time but twenty years later he finally sold it to us.

By then we knew the entire history and ownership of the property from when Florida became a state, but we got title insurance anyway. The title company totally screwed up. Neither of the names on their paperwork were correct. They had not read the terms of the contract - it was a cash deal and they were trying to make us put everything into escrow. They delayed the closing FOUR times and stretched it out six months past when it was supposed to happen.

On the day we were finally closing suddenly everyone disappeared out of the office, leaving the seller and me in the meeting room going It turned out that they decided that moment was the perfect time to take photos for their company Christmas card. What should have been a quick, clean deal, took six months of waiting and five hours of mucking around in their office - and they never offered us any water or coffee even though they were wandering in and out carrying bottled water and coffee cups.

Fortunately I now have a friend who has redeemed the title industry for me. I was ready to write off the entire industry because of that company, but she works for a good title company who has done some excellent work for me.