Christine Rickard and Francisco Reyes saw a home they thought would be perfect for them and their young daughter.
“We found our dream home. We got a contract on our dream home and now it’s over two years later and we still don’t own the house,” Rickard said.
The South Florida couple thought they were getting the perfect home at a bargain thanks to the continuing foreclosure crisis. Instead they claim they walked into a real estate nightmare. Experts say the foreclosure crisis in South Florida far from over. They say there are still some good prices, but there are also plenty of land mines that can turn a good deal bad.
Rickard said the home near Coral Gables caught their eye in early 2012.
“We saw the for sale sign. I’m seven months pregnant. We’re so excited,” she recalled. “This is exactly what we’ve always wanted. It’s perfect. Now I’ve obviously had the baby now. She’s going to be two and we still can’t close on the house.”
But these days Rickard and Reyes, who is also a U.S. Marine officer, joke their little girl will be in college by the time their family owns the house they love. The family says they tried to close the deal, but the owner couldn’t deliver the title – the legal ownership of the property. Now the couple is battling with the owner of the property.
The family says the owner – a company called Foreclosed Assets Sales and Transfer Partnership, or FASTP – signed a contract to sell them the house two years ago for $405,000, but is now trying to back out.
Rickard claimed, ”They want to sell for more money to someone else.”
County records show there were code violations at the property before Rickard and Reyes ever got involved. Rickard said work was also done without permits, including a room that was added by a previous owner.
“This is very frustrating,” Rickard said.
The owner of FASTP, who is suing the couple, calls them “kooky” in legal filings. The owner also accused them of slowing down work when Capt. Reyes sent a warning concerning surveyors, writing that they ”do NOT have my permission to enter the property …”
Now, there’s yet another hurdle to clear the title – a $40,000 lien a construction company owner has slapped on the property because he says FASTP didn’t pay him.
Real estate attorney Norman Powell told NBC 6 these kinds of situations are happening across South Florida.
“It’s extremely common,“ he said.
Common because with over 18,000 foreclosures last year, Broward County is one of the hardest-hit areas in the U.S. Miami-Dade County still has plenty of foreclosures, too – more than 16,000 in 2013.
“We saw a boom down here with real estate. It’s not uncommon to see that people would have taken out home loans, started projects ... but they may not have closed a lot of them out,“ Powell said. “All this unfinished business, work done without permits or not up to code, liens, unpaid property taxes … can halt a sale.”
Powell showed NBC 6 how for $225 a title company can run a thorough check on a piece of property, to make sure the property is clear of such pitfalls. He cautions potential buyers to not fall in love with a house until that search shows the property is clean.
“A great deal may not be such a great deal after all,” he said.
In the meantime, Rickard and Reyes are hoping their deal will work out because realty data shows that the same house in today’s market would cost $550,000, about $150,000 more than they are paying.
It doesn’t seem likely both parties will be able to come to an agreement. In the lawsuit, FASTP called the couple’s actions "a blatant attempt by two sophisticated buyers to distort the truth …” But the court recently tossed out most of the claims FASTP made against the couple and said they weren’t interfering with inspections.
Powell offers the following tips if you are in the market:
Considerations for Buying Distressed or Foreclosed Property
1. Anyone with limited experience in buying distressed or foreclosed property should work with an experienced real estate professional that specializes in foreclosures. Engaging an experienced real estate attorney, title company or agent, will help you navigate and avoid costly pitfalls.
2. Personally visit and, if permitted, inspect the property. An inspection will allow you to make an assessment of the condition of the property. It will also allow you to determine whether the property is occupied, which may require an eviction or ejectment legal action. Remember, you are buying the property “as is.”
3. Obtain a comprehensive title search of the property. A title search will reveal the record owner(s) of the property, any unsatisfied mortgages, liens, or other items such as unpaid real estate taxes. A title company or real estate company can provide you with a title report. You do not want to buy a distressed or foreclosed property thinking it’s free and clear and you end up buying it subject to mortgage liens.
4. Obtain a comprehensive lien search of the property. That search will reveal any open building permits, code violations, or other unpaid municipal services. A lien search company can provide you with a report or you can request it yourself for the county or municipality.
5. Determine the sale price of comparable properties in the area. You do not what to overpay.
6. Avoid getting emotionally attached to the property. Walk away if the research reveals issues that may be costly and difficult to work out.