Getting a complete understanding of the property may include multiple trips to city hall, archives, and zoning departments, so chose and agent with experience and knowledge of who to speak to and even more important, what to ask.
Even if the property has been in the family for years or has been passed down through an inheritance, that too would need to be checked to insure the transactions and change of ownership were properly registered and that there are no outstanding claims or liens from long lost relatives. The building permit history is a very important piece of information that may affect the value of a property, especially if any changes have been made to the original structures. Permits must be in order, inspections completed and the paperwork properly signed and filed.
You may be wondering “shouldn’t it be my attorney who handles checking the title of my home to make sure it is clean?”. The answer is both “yes” and “no”. Generally an attorney is retained once an offer on your property is made and accepted. Your attorney will negotiate the actual contract, hashing out the terms of the agreement and will file the necessary papers to reflect the new ownership of the property. He will investigate and make sure “title” is clear but the attorney does so as part of the contract stage of the sale.
As an owner looking to sell your property that information is useful to you far before the point of negotiating the specifics of the contract. A professional real estate broker willing to invest some time and energy will be able to get that information for you and help you understand how that information affects the value of your property.
For an example, an owner closed in a porch that had originally been open to create more indoor living space years ago without a proper permit and it has been deemed “illegal”. The property itself may now only be valued based on the portion of the property that is recorded as “legal”. Oftentimes the portion deemed illegal can be made legal simply by filing the proper building permits for that construction. Potentially this small change can add value to the property.
Another example, is the additional value of building rights. Sometimes a property has additional building rights and the owners may not even know that. The very fact that the potential new buyers would be able to expand the home could increase the value of the property. The additional building options may also make the property open to a wider potential market. A buyer may love the area but your property is too small for them, having the option to build additional living space may now make your property more desirable to those buyers too.
Another scenario, one we recently dealt with; while researching the history of a property, it became apparent that the property simply could not currently be sold at the value that the sellers had expected. It turned out that the city was planning to expand a road where the property stood, drastically changing the value of the property for the worse. Trying to sell such a property would only result in a loss of time, effort and resources.
In all of these cases, marketing a home without a full understanding of the history of the property or the future prospects and potential will lead to either undervaluing a home or listing it above true market value. Either scenario comes with repercussions that can potentially harm the sale of your property. The attorney typically steps in at the point where the parties are ready to “go to contract”, meaning the contract is being written and reviewed by both parties. Waiting until that point to uncover this information may disrupt the process and, in most cases, the deal will likely be lost or potentially tied up for months in the system. Trust me, your attorney will be thrilled that your agent helped to properly prepare the documents for their review and that all issues were transparent before the entering into an agreement!