Tag Archives: title report

What in the World Is a Lis Pendens?

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MoneyTips.com (via NBC news affiliate NewsWest 9) quoted me in Should I Worry About A Lis Pendens in A Title Report? It opens,

Is there anyone this side of a Supreme Court Justice who hasn’t signed off on a document without reading or understanding every single word and Latin phrase? When it comes to buying a house, it pays to know the phrase “lis pendens”.

A lis pendens is the Latin term for a Notice of Pendency of Action. It means that a lawsuit is pending against the title of a property. The lis pendens is a public notice letting buyers know there is a dispute over the ownership of the property. It is filed in the county clerk’s office wherever the title of the actual property is listed.

Anyone willing to purchase property under a lis pendens is subject to the outcome of the lawsuit. This is why you should be worried if you discover a lis pendens on a title report, says David Reiss, a former private practice real estate attorney who is now the Academic Program Director at the Center for Urban Business Entrepreneurship (CUBE) at Brooklyn Law School.

“Depending on the underlying action that is the subject of the lis pendens, ownership of the property might be at issue. If one of the parties of the underlying litigation wins, they may own the property,” Reiss explains. And if they own it, that means you don’t.

For buyers, a lis pendens should throw up many red flags. Lenders are usually unwilling to finance a mortgage until the lis pendens has been removed from the title. In addition, while a property can still be sold while there is a lis pendens, title companies will not insure the property, and that alone should be a deterrent to purchasing.

A lis pendens can be placed on a property for a variety of reasons. It could be due to divorce proceedings, an inheritance issue over a property held in estate, taxes owed to the IRS, or the property could be about to go into foreclosure. There could even be criminal fines owed.

“A lis pendens can be time-consuming and aggravating at best,” says Denise Supplee, a realtor and Co-Founder and Director of Operations at Spark Rental. “That being said, it is possible to move beyond these. Depending on state laws, there are steps that can be taken to have these attached lawsuits removed. However, there may be a cost of an attorney and definitely a loss of time.”

Because a lis pendens can only be about the property itself and not about the parties who have an interest in the property, there are two ways the lis pendens can be expunged, says Reiss. The first is “if the lis pendens really has nothing to do with the property and should never have been there in the first place, you can fight it,” because a lis pendens is a powerful tool that is often subject to abuse. The second is if the parties involved ultimately resolve the lawsuit.

Why Houses Don’t Sell

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I was quoted on Trulia in 8 Reasons Your House Isn’t Selling. It opens,

It’s a seller’s market in many cities across the U.S. If your home is in one of those cities, say Charleston, SC, or Colorado Springs, CO, and isn’t getting offers, something could be wrong. The good news? Knowing there’s a problem is the first step toward resolving it. However, there could be many reasons your house isn’t selling. We’ve asked real estate professionals and agents from all over the country what those top reasons might be — and they’ve provided some sound advice on how to remedy each situation.

1. You’re overconfident

Being in a seller’s market might mean that your home will get snapped up for premium price, no matter its condition. But that isn’t always the best strategy to count on. “Sometimes homeowners and agents get overconfident in a seller’s market and get lazy about ‘Home Selling 101,’” says Sep Niakan, broker and owner of HB Roswell Realty in Miami, FL.

Solution: Be realistic from day one. Although you may love your house, brace yourself for it to potentially sit on the market for quite some time. And no matter the market, it’s still important to “position your home to sell well,” says Niakan. “What does that mean? Staging, staging, and more staging.

2. The house is priced too high

Classic supply and demand conditions come into play in a seller’s market: There’s high demand, yet low supply. Therefore, you can usually expect to get more money for your home. But that doesn’t mean the sky’s the limit when it comes to your listing price. “In a seller’s market, a seller may feel comfortable pushing the asking price a bit higher, and this can be a huge mistake,” says Chase Michels of Brush Hill Realtors in Downers Grove, IL. “Determining the best asking price for a home is one of the most important aspects of selling a home. If your home is listed at a price that is above market value, you will miss out on prospective buyers.”

Solution: Make sure that you and your agent are certain of the value of your home in your market and price it right. “Get an analysis of the local market with a professional agent, solid comparables, and specific market trend data,” says Jill Olivarez, a Miramar Beach, FL, real estate agent.

3. The home needs some TLC

It can be a bitter pill to swallow to pay for home improvements that you may not enjoy for long. But if you want to sell for full asking price, you might need to get your house in a condition that warrants it — and not base this number only on price per square foot. “Retail buyers understandably still want the most house for their money,” says Barbara Grassey, author of How to Sell Your House Fast in a Slow Market and founder of the West Florida Real Estate Investors Association.

Solution: “The seller should have amenities comparable to other properties for sale in that price range and should really upgrade certain amenities,” says Grassey. Some upgrade examples, she says, include a pull-down gooseneck faucet, an upgraded ceiling fan, a double-bar towel rack, or upgraded door handles. They sound simple, but a few small changes can make a big impact.

4. There’s a problem with the title

“Title” in this case doesn’t mean the cute name you might have given your place (“The Laurels,” “The Conners’ Corner Cottage,” etc.). Rather, it’s the document that shows ownership. “One reason a house won’t sell is because there is a problem with the title to the house that spooks buyers,” says David Reiss, law professor at Brooklyn Law School in Brooklyn, NY. Here are some examples he gives of title problems:

  • Conveyance without a recorded deed (can sometimes happen in transfers between family members).
  • A paid-off mortgage that is still showing up as a valid lien on the house.
  • A mechanic’s lien that was filed for work done on the house by a subcontractor.

Solution: “Some [title] problems just require a little time to resolve,” says Reiss. Contact the title company to find out what you need to do to prepare for selling — then do it.