It’s Friday afternoon and only one more closing to go. A nice simple one too. Cash buyer buying from for sale by owner sellers- no payoffs and no title issues. Great- quickly close it, package it out, and head home for a relaxing weekend. It is a husband and wife buying from a mom and daughter and and buyers show up first, looking very excited about buying their first home. We get them settled in and “Ann” the seller that I have been dealing with arrives with a cute little girl who is excitedly looking around for toys and/or cookies. Wow, Ann is a young looking Grandma. I ask her when her daughter, “Jane” will be arriving so that we can start the closing she looks over at the little 6 year old and tells “Jane” to come on in so we can start the closing. Shocked, I realize that she was not kidding. She is actually in title with a 6 year old child! Well, besides the fact that I do not have crayons for signing the deed, I am pretty sure she is a minor. Buyers are in the closing room, oblivious to what is happening in the lobby. I explain to “Ann” that her daughter does not have the legal right to sign documents and try to determine how or who would ever have put a child in title. As it turns out, a few years earlier, her and her ailing husband asked an attorney to add their daughter to title so that if anything happened to them she would get the house. Apparently the attorney failed to ask them the child’s age, only asked for the name. She was 3 years old at the time! Well, needless to say, we could not close that day.
Mom had to go to court to have herself established as legal guardian for her daughter and then have the courts approve the sale of the daughter’s assets. As it turns out, the court decided that the daughter’s 50% equity that would be received on the sale of the home would need to go into trust for the daughter to receive many years later when she reached legal age. The roughly $120,000.00 that was to be received at closing and used to purchase another home to leave behind the sad memories of deceased dad/husband would now only be $60,000.00 pricing her out of the home she wanted to buy! Add to that the 60 day time period to get through the courts as well as the legal fees expended and all does not end well. I am just glad I wasn’t the one who had to break the news to the buyer that they were going to have to start looking for another home.
Luckily in most cases, real estate agents are involved and would hopefully know that a 6 year old seller is a problem. In looking at the purchase agreement for the above transaction later, it was determined that the mother had signed for the daughter. After all she is her mom. Should I have noticed that the signatures were very similar? I guess I have a hard time even faulting myself for not catching that…
Well, no closing, no early Friday departure, but a little drama and some additional knowledge never hurts anyone!