Distressed Home Q&A Recording - September 17th, 2021

Distressed Home Q&A Recording – September 17, 2021

For your ease, we have provided a transcript of the Q&A Recording.

Hey, this is Evan with Meli, back for our monthly Q&A. I just want to take a quick second to introduce Meli. Meli was formerly Simple Sale Central Florida. We ended up rebranding the company to the name Meli, short for “ameliorate,” which means to make something better.

So in our line of business, we find houses with title issues like probates, liens, code violations, things like that, and we work to fix the situation for the property. We also, of course, buy properties that have excessive repairs and things of that nature. But, now we’re really focusing on properties that have extreme title issues. A lot of the clients we work with are in that category, so we decided to just really market toward that set of people that are going through those types of situations. Examples like, they need a probate on a property, a lien negotiated, or things of that nature.

1. What are my options if I have a really difficult problem with my home?

If you have a difficult problem with your home, I suggest you consult an attorney and see what they think about your situation. You can also consult with home buying companies like Meli, for example. We deal with those situations. Other homebuyers probably also deal with a lot of these situations.

As far as your real options, I recommend you consult an attorney, or someone like us or another home buyer. Someone that’s experienced in handling situations where there is some kind of title issue on a property.

2. I tried to get a lien off my house but can’t figure it out. Can you help?

Of course, we can. We’ve negotiated, at this point, hundreds of liens on properties mounting in millions of dollars for clients. We’d just get on a call and discuss your scenario and really try to help understand what’s going on. If it’s a situation we think we can help you with, we would then look deeper into the records. We may see that lien filing, see exactly what they’re looking for, what they’re looking to get, and if it’s negotiable…

But we can definitely help. That’s exactly what we are looking for, is to work with clients that are going through those types of situations.

3. I’ve never heard of a probate before, what is that?

So, a probate is when you have a relative, let’s say, for example, a parent that passes away. In order for their assets and belongings to get conveyed to the heirs, whether that be children or whomever, you have to go through a process called probate.

This is essentially the legal way of showing that you have the right to inherit that deceased individual’s belongings, whatever that may be. Whether it be a house, cars, money, things of that nature, you would go through the legal process called probate. During that process, it will determine who is entitled to these items. Maybe you and your siblings, or whoever, are entitled to these. In some scenarios it will show that you are not entitled to those things.

The reason for that is to make sure that people aren’t trying to inherit assets that aren’t theirs. People try to maliciously take assets from a person, which I’ve seen before. I’ve seen people create a will or falsely say they inherited a house, when in fact it’s not legally theirs. Those types of things do happen. That’s why probate is important, is to make sure that whoever is supposed to inherit the house actually inherits it.

4. How can I sell a house if it’s inherited in probate?

What I would recommend is pretty simple. Even if it’s in probate, you can still sell it, you would just go under contract with a home buyer. And they would buy the property whenever the probate was through.

Unfortunately, I’ve seen people trying to do probates by themselves many times, and I’ve never seen it end well. But people try to do it because they think they’re saving money. Ultimately, they don’t understand the law well enough. They don’t file the right documents, and they end up with an unofficial probate that doesn’t convey the property correctly. In those snares, they have to go back and fix it, or they end up spending a lot more money on attorney’s fees to clear up the title issues that they’ve created.

So, to sell a house that’s in probate, hopefully you’ve got an attorney and you’re going through that process. Then, you’d sign a contract with someone that’s looking to buy the property and close on it. That’s really all there is to it. There’s not a huge process. Once that probate is finished, if it’s done properly, you would then just proceed to closing.

5. How should I start trying to fix the title issues on my home?

I would highly recommend that you reach out to an attorney. You could also reach out to a company like Meli, if not Meli. We’ll discuss the issue with you and see if it’s something that we can help you with. An attorney will be able to try to help you, too. They’re going to be able to get you through that process in most scenarios. But, they may have to have a retainer for their work, or maybe they can negotiate through a scenario, but by the time you pay them, it’s not worth it.

You have to think about if it’s really worth it. If the attorney can save you hundreds of thousands of dollars, then you should just consult the attorney. But if not, then someone like Meli can help fix those title issues, and we don’t do it for a fee upfront or anything of that nature, and just fix the scenario, whatever that scenario is. And then we would either buy the house from you or we would list it for you and broker it and get it sold.

6. How can I resolve a tax lien on my home?

Your options depend on what type of tax lien it is. If it’s a property tax lien, then you would have to just go pay it. If you owe $5,000, you would just go to the County and the municipality and pay it. As a note, property taxes are not negotiable. You cannot negotiate those down. Now if it’s an IRS lien, those are negotiable. Depending on your situation, you can go try to negotiate those down, and then ultimately come to a price for that lien that you would negotiate through.

So, you can negotiate the lien and sell the property simultaneously. It’ll take anywhere from 60-120 days to negotiate those liens with the IRS, and then you’ll have that negotiated payoff. Let’s say it was $100,000 and you negotiated down to $80,000. You can have that payoff ready for the closing.

Again, with the property tax lien, you can’t negotiate those. If you didn’t have the money, a lot of times people would just end up selling it. What you don’t want to do is wait till the last minute and try to sell it because that property is going to go to a Tax Deed sale. If you wait till the last minute, the sale may not go through fast enough. You just want to be very careful. If you’re within 30 days or less, you really need to move quickly. Make sure that you avoid that.

We’ve had situations where we paid for the taxes before closing to make sure that the property wasn’t sold, or wasn’t sold as a Tax Deed sale. There was a property; they owed about $6,000 tax liens. We went and paid them before the closing. So, we saved the property and ended up buying it a few days later.

7. What do I need to do to sell my house if it has code violations on it?

With code violations, it could be a couple of different things. It can be active violations, or it can be code violation liens. With an active violation you have a couple of different options. One, you can fix that situation. Let’s say it’s something simple like you haven’t mowed your grass, then you just mow the grass. Then, you could go to the code violation authority and code enforcement and tell them, “Hey, I mowed my grass. Please drop this.” And they’ll typically drop it. Maybe you may have to pay a small fine for that and then you’d be able to sell the property.

Now the other option: some people will buy the property with the code violation. Say it’s an active violation, or there’s a structural issue with the property and somehow, you’ve got a code violation. Some people will just buy it with the active code violation using what’s called a Hold Harmless. This holds them, essentially saying “I know that there’s a code violation on this property, I’m still going to close.”

With code violation liens, you’d fix the situation and then pay the lien. Code violation liens are unusual because it takes a while to get one. But, let’s say you hadn’t mowed your grass in a year, then you got it mowed. You could then go to the code enforcement and say, “I’ve now mowed the grass. I know I owe $15,000 in code violations. I’m going to pay those and settle.” In that scenario, you can do that, or a homebuyer that will close with the code violation lien. However, this is very uncommon for people to do. We do it. We’ll do it on properties, but a lot of buyers will not do it until those code violations are cleared up.

So, that’s ultimately, what you do is you either sell it as-is with a Hold Harmless, with the liens or with the violation, or you fix the situation and then sell it. So, it’s really up to you. You may make more money on the property if you clear up the violation. It just depends on what time and money you can put into fixing the situation.

8. Is it possible to sell a house with title issues?

Yes, it is very possible to sell a house with title issues. It depends on what kind of title issue it is. If it’s a probate, and there’s not a clear title, it’s going to be pretty difficult. A lot of people will not buy it. We would buy something like that, but most people would not.

If it’s something like a lien, like we just talked about, maybe someone would buy it. If you’re buying out a partial share of the property, then there are some buyers that would probably do something like that. So it is possible. You would just need to talk with a buyer and see what they’re comfortable with doing, and see if it’s a good fit.

9. How does a consultation with Meli work?

To get started, you can give us a call or you can reach out on the website, MeliHomes.com, and let us know what’s going on with your situation. We’ll take a few minutes and talk you through it and see if it’s something that we can work with you on. And if it is, we will.

We will either make you an offer on the house to buy it, list it, or just do a straight consultation. If we decide to work together on a consultation, we would look at the situation and charge you a fee depending on what exactly we need to do to fix it. If you agree, we’ll then perform those services for you. So, yeah, that’s essentially it.

10. How can you list my home if it has title issues?

Well, typically you don’t. A lot of people won’t. What we would ultimately do is we would fix the title issues for you, and then list it. Or we can list the property while it has title issues, then fix those title issues while we’re negotiating a sale of the property.

Let’s say it takes us 60 days to fix the title issues. During that time we will find a buyer for the property if we were to list it for you. That’s how we’ve done it in the past, and it’s worked out really well. We’ve done probates where we’re simultaneously getting through the probate, finding a buyer for you, and having that sale ready to go as soon as the probate is done.

Wrapping Up

As always, thank you very much for listening to this. I hope it was informative. You can give us a call at 407-338-4183. That will get you through to our phone answering service and they will take your information. Also, if you want to call, you can request Evan. That’s me. You can request Evan Shelley directly, and they will transfer you to me and that’ll get you right to my cell, if you want to go that route. Then, I’ll get back to you as soon as possible.

You can also go to our website at MeliHomes.com, and answer a few questions, and that will help us determine what’s going on with your property. That’s it for our September Q&A with Meli Homebuyer, Brokerage, and Consultant. Feel free to reach out, we’ll try to help you as much as we can. Thank you.

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Meli encourages you to reach out to an advisor regarding your own situation. Please consult with your advisor when making legal or financial decisions.