Selling your self built house

[dablack]

I was talking to a buddy and he said that one of his friends had built their own house and then had trouble selling it a couple of years down the road.  Has anyone else heard of such a thing.  It was mostly a paperwork problem since there had never been a mortgage on the house and the title company had problems getting the proper paperwork together. 

Has anyone else heard of any problems like that?

thanks
Austin

[ChugiakTinkerer]

My brother built a place many years back and had issues with the bank extending a mortgage because it never had a code inspection.  He wasn't selling at the time, just looking for a loan to finish the interior.  The bank insisted on an inspection that revealed some shortcomings in the concrete foundation on one wall.  My brother bit the bullet and had the footing shored up to make the bank happy.  A few years later he sold the place no problems.  My take away is that getting code inspections done, even if not required, will some time down the road enable a bank to issue a mortgage comfortable in the knowledge that the house won't fall apart.

[flyingvan]

  On the paperwork front, the parcel(s) I just bought ran into a title problem---there is a 15' strip eased to the main parcel that there was never any title insurance on, so the title company had a tough time.  Had to get quitclaim signatures on people no longer on the title. 
   Around here, banks will not lend against unpermitted structures.  They are very, very hesitant to lend against properties on piers, considering them both temporary structures and fire hazards.  FHA/VA will provide loans on prefab structures sitting on a slab, but not if they are sitting on piers

[dablack]

From what my buddy said, it was a title issue.  Nothing else.  You can get a loan on anything here.  Doesn't matter that it was built without inspection.  In most counties in TX, if you are in an unincorporated area (not in the city limits), then it is just a septic inspection. 

I'm not too concerned, but I wanted to ask to see if anyone else had problems.  Sounds like the title company he used had problems. 

[JRR]

I know many will disagree, but I believe there is value in "never totally paying off a mortgage".  Once a mortgage is secured, there is a certain degree of knowing that every legal aspect; including a paper trail of all paid taxes, surveys and liens, has been observed and ownership is guaranteed ... that is, if anything can be "guaranteed".  So if you have a mortgage and the balance gets low, you may want to consider borrowing more money against the property.  It depends on the service costs of the Mortgage company for such ... but its something I suggest we all consider.  Makes it much easier to pass legal ownership on to the next person ... either buyer or heir.  Or so I believe.

[BenjaminShaw]

Not yet! But he may consult a good lawyer for solving the problem.

[Dave Sparks]

From what my buddy said, it was a title issue.  Nothing else.  You can get a loan on anything here.  Doesn't matter that it was built without inspection.  In most counties in TX, if you are in an unincorporated area (not in the city limits), then it is just a septic inspection. 

I'm not too concerned, but I wanted to ask to see if anyone else had problems.  Sounds like the title company he used had problems.

I see this problem on Offgrid homes from time to time. It can be very hard to get a loan and right next to that is Fire insurance in remote rural locations.

This is all solved by using cash and self-insuring for fire insurance.  Not many can afford this but then again not many want to live offgrid.