Dirt Debacles #1 | Guests Sam Bowers, ALC and Christina Asbury, ALC

         

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Speaker 1: Welcome to the Realtors Land Institute podcast, The Voice of Land, the industry's leading land real estate organization.

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Justin Osborn: Hello, this is Justin Osborn, Accredited Land Consultant with the Wells Group in Durango, Colorado. Today's episode is the start of a new series on the Voices of Land podcast called Dirt Debacles. That's right folks, every month we're going to get into the dirt, having RLI members share their wild tales of selling land. Today's guests are both accredited land consultants and RLI 2024 board members, they helped come up with this idea, so we're excited to have them on as our first guest on this new series. Christina Asbury joins us from North Carolina. She's a REALTOR with two decades of experience in coastal North Carolina near Wilmington and Marine Corps Camp, Lejeune. She's here to share her first-hand knowledge and antidotes about dealing with heir and estate issues in the real estate industry. You'll love the story about Daryl. Sam Bowers is from Newman, Georgia, just southwest of Atlanta. He's been a licensed real estate agent since 1988 and a real estate broker since 1991. He's currently serving as RLI's 2024 president. Welcome to the podcast, Christina and Sam.

Christina Asbury: Thank you so much for having me.

Sam Bowers: Thank you for having me. I look forward to this discussion.

JO: Yeah, me too. I tell you, we've just got so much crazy stuff that happens in our industry and a lot of times, it's way different than what the typical residential broker deals with. So I'm excited to hear about some of your crazy stories that you guys have encountered. And I know you shared some wild stories when we were back at the NAR conference in Anaheim about deeds and family inheritance issues. And there was one situation, where an obituary published in a paper turned up in unknown heir. So I wanna start the conversation with hearing a little bit more details about this.

CA: Okay. Yeah. So that one's mine, Justin. So in Eastern North Carolina, we deal with a lot of landowners who were given grants even as far back as from the king and the queen of England when Eastern North Carolina was first settled. I was working with one family and their land had been in their family since the early 1900s, it didn't go quite back that far. But I had five siblings, all five were on the deed, any good land professional knows the first thing you do is you read the deed, so you know what you're selling. And read the deed, there were five heirs on there, one of the heirs was the appointed family member for the spokesperson, we'll call him. And I talked with Jimmy about all the things with the family and what we're doing and who owns it and all the stuff. So we get it on the market, pretty 10 acre tract of land. We get it on the market after a couple months worth of marketing, we get it under contract. The buyer begins their due diligence, everything's rolling along great, until we get to the point where the title search comes back. I get a phone call from the attorney and the attorney says, "Hey, we've got one, two, three, four, five, we've got all these sellers, but can you tell us about Daryl? We're not seeing him on any of the paperwork."

CA: I'm like, "Who's Daryl? Let me call my sellers and look into that." So I called Jimmy, my spokesperson seller, and I'm like, "Jimmy, who's Daryl? We need Daryl's signature on this stuff, I don't recall dealing with a Daryl in this transaction." And his words to me were, and I hope they can bleep this out, "Who, that's son of a bitch?" So in conversing with him, I'm like, "Yes, that would be the gentleman. How can we get ahold of him? Where is he at? Tell me why he's involved in this and I'm just now finding out." Well, long of the short, when their father died, they were having the receiving of the friends and family, in walks in this man, who proceeds to say, "Hey, what's up, fam? We're family, nice to meet my brothers and my sisters and I've heard a lot about you." And their mother's sitting there obviously grieving her husband's loss and she's taken aback and they're like, "What in the heck is going on?" Long of the short, he proceeded to tell the family that he had been getting birthday cards in. Apparently, his mother and their father had had an affair, he was the love child of sorts. And he was like, "I've been getting birthday cards every birthday. Always promised him that I would never come and confront the rest of the family until he died. He's passed, so I'm here."

CA: Apparently, he gave a compelling enough story, Justin, that they proceeded to put his name in the obituary.

JO: Wow.

CA: By listing him in the obituary, that pulled up in the title search and it named him as a heir to the estate.

JO: Oh my gosh.

CA: So let that sink in for just a second there. It's like, okay, so no DNA tests needed, we didn't need to call Maury Povich. It turned into a little bit of a family history ancestry DNA situation there for a minute. But anyway, long of the short, I'm like, "Okay, so we've got an obituary. He's named as an heir, whatever, we'll get him to sign." I've ran across this before where an unknown heir or a long lost kid or a stepchild or something popped up and we had to track 'em down, we're realtors, we're resourceful, we have ways to find people, okay. Don't think you can ever hide from a realtor, all you listeners out there. So start tracking down Daryl, can't seem to find him in any of the apps that we use as realtors to locate people, can't seem to find that he owns any property. I asked the family to help me locate him or like we think he's from Upstate New York, let us call a few people. Long of the short, you'll never guess where we found him, where do you think we found him, Justin? 

JO: Man, Mexico.

CA: Close. Daryl was serving a life prison sentence in Rikers Island in New York.

JO: Oh, wow.

CA: So we were unable to sell the property because no one could explain how he was going to sign the deeds and not be under duress serving a life prison sentence. And then where were we gonna put the seller proceeds money? We can't just deposit it to his commissary account.

JO: Man.

CA: So the property never ended up getting sold. We were actually in breach of the contract because we couldn't convey clear title per North Carolina state laws.

JO: Oh, no.

CA: And now, I've got five family members sitting there with their property held hostage by a long lost sibling that they didn't know existed that they put into an obituary.

JO: Golly. And so how long ago was it when all this took place? 

CA: This is probably four or five years ago.

JO: Dang.

CA: So not that long ago. It was definitely pre-COVID.

JO: Golly.

CA: But that is one of the definitely more interesting situations. So not only now do we have to read the deed, apparently we need to start reading obituaries that are tied to the estates of these properties.

JO: That's crazy. I've been doing this, what, I guess, 23 years now, and I have never heard of a story like that. That's kind of up there with getting the icing on the cake, Christina. But I hadn't heard Sam's yet. So let's see what Sam's craziness has to come to the table here.

CA: See if you can top that, Sam.

SB: Well, I don't know if I can top that, my worst estate and heirs' problem I've ever had was actually heirs of an estate before the parents died. They were the children, the parents were still living. The parents contacted me about selling some property for them, went down met with this man and the lady, very nice, well up in age. He was retired, had worked for Coca-Cola forever as a truck driver, and his wife up in age was still working the night shift at a mill, driving to work every night, because they couldn't make ends meet. Well, they... Over the years, they had saved up money and built up probably 200 acres of land, and they had given property to their two children to build houses on. And so they said that he was worried about his wife, their health was not well and he said, "I wanna sell some of my land so my wife can finally retire and not work second shift at the mill forever." And so we take a 100 acres of the property, we put it on the market. Well, the children got so mad that they would not speak to their parents and then they started putting spike boards in all the roads, burying them. So anytime anyone went in there to drive on the property, to look at the property, it flattened tires.

JO: Man.

SB: And we finally had to get the sheriff involved 'cause that happened four times. And the guy... Actually the guy we ended up selling it to, he was the first one that ran over the nails. And but they had... They were... That was their land, even though here are their parents, they were at the time were probably in their very late 60s. He was retired, but working odd job, she was still working second shift. They were sitting on all this land and the kids disowned them because they sold part of it so that they both could retire. It got, like I said, it got so heated the sheriff had to get involved in it. And I don't know that they ever spoke to them, even up to the day they died. The families that we... That I've always dealt with, that I thought were the closest and a lot of cases have ended up being some of the ugliest estate work I've ever done. That those families, when money got involved, it... I tell people, green is more important than red blood. And when money got involved, the families and the interworking of the families just got, it got very ugly in trying to divide stuff up.

JO: Man, that's a great quote, I've never heard that. Did you come up with that, Sam or is that something that you stole from somebody? 

SB: I heard that from an old real estate guy one time that used to, he... 'Cause he dealt a lot with estates and I sort of laughed when he first told me like, "Yeah, yeah, whatever." 'Cause, families are tight, but then over the years, you see these families that when the kids get involved in giving up money and stuff, it can get very ugly and it don't matters if they're siblings or not.

JO: So green... Say it again, was it green is deeper than red blood? 

SB: Green is deeper than red blood.

JO: Yeah, I like that. Well, so what's the takeaways? Christina, you said from yours, alright, start looking at obituaries, that's a one in a million story. Is there anything that you walked away from that saying, "Alright, I'm gonna try to be proactive in doing X, Y and Z to make sure this doesn't ever happen again?"

CA: Short of looking at obituaries, just start asking the seller, are there any other long lost relatives or heirs or stepbrothers or stepchildren? Did somebody get married we don't know about? You never know. I ran into some other situations too... I had a piece of land... No, actually more of a building lot here, that a lady called me and wanted me to sell. And I look at the deed and it's John and wife, Julia and I didn't think anything of it. She's like, "Oh, John died 20 years ago, time to let go of the property." Great. Awesome, put it on the market. Get it under contract, title search. So the title search came back and they said, "We need a copy of the marriage certificate, she's not listed as his next of kin on his death certificate." Okay. So I call my seller, "Hey, I need a copy of your marriage certificate, I know it's been a long time." And she says, "Oh honey, we were never married." And I'm like, "I'm sorry, pardon me, your deed says and wife." She said, "Yeah, I know he thought that he was being smart by putting and wife on there so that I would get the property when he died. And I was mad at him from the day that he put wife on there because we never took vows."

JO: Oh my gosh.

CA: It's like, "Okay. So you were never legally married, alright. Who were Christine and Dan?" And she says, ""Oh, well, he got married after we split up and had two kids, that must be their names." So ended up tracking down the original attorney who's still in practice that did that deed that said and wife. And I'm like, "Mr. Attorney, can you please help me understand, what on earth possessed you to put John and wife Julia?" And he said, "Well, the man instructed me to." And I said, "Well, at what point do you have to check or verify a marital status." In the state of North Carolina, I don't know about your state, but you should know the rules wherever you may be. In the state of North Carolina, an attorney is not required to check marital status through a marriage license when preparing a deed.

JO: Man, that's crazy.

CA: And then furthermore, they're not required to do any kind of title search or title examination when they prepare a deed for transfer as part of an heir or an estate situation. So I have another beautiful piece of property that is very developable. And four ladies say that they own it and going back through all of the deeds and going back through the chain of title, no title search has been performed in over a 100 years.

JO: Wow.

CA: And there's no way that those four people are the only four owners of that tract. But every time somebody died and they went to an attorney and said, "Hey, so and so died, we need you to deed it to XYZ." And the attorney just deeds it to XYZ and never does a title search to find that obituary or to find that long lost cousin of that heir. So now, I'm stuck in a situation where I have a beautiful piece of land that's worth a lot of money, I have a buyer who wants to buy this piece of land, but it's gonna cost $50,000 minimum to do the historical title search to verify that those people can actually transfer title. So there's no way to even put the deal together, I don't even... I can't verify that I have all the actual owners to either sign a listing agreement or to sign a contract and it becomes valid and enforceable.

JO: So the title company says, we want $50,000 to initiate this search? 

CA: An attorney who specializes in estates here needs $50,000 as a retainer.

JO: Wow.

CA: To begin looking into a 100 years worth of historical titles and deeds. Correct.

JO: Man.

CA: So my takeaway there is, do title exams and title searches if you're an heir or an executor or a person in charge of an estate, do a title search before you convey the title from that deceased relative or that deceased person to the people that it's supposed to go to. And make sure that you have that actual owner, please.

JO: Yeah. Well, and that's great advice for any listener, it doesn't even have to be selling an heir or selling an estate. You start selling these ranches and big rural parts of land that we're selling. And you've got easements that show up that people don't know about, you've got boundary disputes, you've got all kinds of stuff that shows up on a title commitment. Where if brokers could just be a little bit more proactive and try to educate their sellers into getting those preliminary title commitments ahead of time, it would avoid so many headaches that come up two weeks, three weeks, however long it takes the title company to issue that after they go under contract.

CA: And then at least you're not in breach of any contract that you do sign where there may be punitive or financial monetary damages.

JO: Yeah, that's a great point. Sam, you got any other stories for us?

SB: Well, the... And speaking about doing title search, make sure now we don't see this as much now, but back when I first started in real estate business back in the '80s, I was still running across older families that did not believe in recording deeds. They kept them. We did a farm, it was probably 350 to 400 acres that when we got ready to started getting involved in the title and everything. Well, they said, "Well, now all the deeds are in granddaddy's trunk and sure enough that they had a trunk that had... They had all the deeds, they had a full chain of title, but nothing had ever been recorded. And the title insurance company liked to have a fit and we wound up getting what we're doing a lot of affidavits and get being able to get title insurance on the property. But that was one thing we used to run into, was that a lot of these old families didn't want... 'Cause in Georgia records are public and they didn't want the deeds recorded. So that is something that we ran into many years ago, about people just not recording deeds or recording surveys.

JO: Sam, I wanna get right back to that and hear more about granddad's trunk, but we're gonna take a short break and get back to the conversation right after this.

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JO: Alright, welcome back folks. Sam, I want to hear more about this trunk. Is this granddad's trunk? Was this in a safe somewhere? Was this something that was in the back of his pickup trunk? Like tell me more about where this trunk was located.

SB: It was upstairs in the house.

JO: Oh man.

SB: I was new to the business. My dad had been in the real estate business since the 1970s. And so I was with my father 'cause my father knew this gentleman and was listing the farm and stuff. And when he started asking them about the deeds and things, and that's when it came up, "Well, they're all upstairs. They're in the trunk upstairs." And being new to the business, I didn't know that was unusual. [laughter] And so sure enough, we went upstairs. It was one of the old the trunks they used to put on the trains, the old travel trunks that from back in the 1800s, early 1900s. And he opened it up and it had a tray in it. He lifted up the tray and sure enough, there was all the... Instead of a safe deposit box where they kept all the family papers, they were all in this trunk.

SB: And so we gathered them all up. My dad said, "Well, we've gotta make copies of these." So we gathered them all up, took them, made copies, brought the originals back to the gentleman, and then took them to an attorney and said, "What do we do with this?" And so with a lot of legal work, they were able to... We had to get affidavits to verify the deeds and stuff and who was living at this time and everything. So it was a good experience as a new agent to go through the process of seeing how to have to find people to get affidavits to testify that these people were living at that time. But we were able to get enough information that I think it was lawyer's title insurance. They insured the title and we were able to move through with the deal because of them being able to get title insurance on it and the people went ahead and bought it. But that was quite an experience of having to dig through all those old deeds and then find people that knew those people back in the... And you went, you start hunting up all the old people in the county. Yeah. And so, but yeah, that was quite an experience to, I've never... I've only had it happen once when I had to go look in the trunk.

JO: But once is enough, man, that's crazy.

SB: Yeah, that was enough. But we don't see that anymore much. 'cause I mean, everything now is people do know to record stuff and so, but back then, people didn't want other people knowing their business.

JO: Man, that's crazy. Well, I mean, I had some craziness happen. We had an organic farm here in Durango under contract where I was representing the buyer and it was 3.5. We were under contract at 3.2 and we got all the way up to three days before closing. Everything's ready. All the closing documents are set. One of the heirs decides that they need more money and that we're selling this too short. And then instead of 3.2, it needs to be 3.5, find this out three days before closing. So buyers are freaking out, obviously refusing not to come up in price. Sellers are contractually obligated to honor the price that we have. And they say, "What do we do?" I said, "Well, we're gonna go up, show up at closing at 3.2. I want you to sign all the closing documents. If this doesn't close, it's not gonna be because of our side. It's gonna be because of their side."

JO: So we did that. Sellers... Excuse me, my buyer signed all the closing documents at 3.2. Seller side never showed up to closing. Said that they would not show up unless my buyers paid another a $100,000 and they got full price. And of course, this was 2020. So when we went under contract, it was right after the shutdown and nobody knew what was gonna happen. Everybody thought the whole economy's gonna tank, the real estate market's gonna tank. Well, we all know it didn't. It started turning around and going up very quickly. And so they decided that they needed more money and it never closed. It ended up with attorneys and ended up in court for six months and my buyers finally decided we've had enough and we found them another property that they closed here in Durango. But man, that was a mess when one of the heirs decided, "I'm not getting enough money out of this deal. We need to raise the price by 300 grand."

SB: Yeah. Yeah.

CA: Wow. I can't imagine. Can't imagine holding deeds in a trunk like people do titles to boat trailers.

SB: Yeah.

JO: Right. [laughter]

SB: Yeah. No.

CA: I mean, I may or may not have a title to a boat trailer in my safe that I might could get to DMV. Thanks for the reminder. [laughter] That itself.

JO: Now, what's kinda your rule if you start seeing... All right, there's two people on title, there's four people on title. Alright, now we're getting to six or eight. What's kind of the point where your eyebrows start getting raised and you're like, "You know what? I really need to try to get one or two signers on this deal. It can be a power of attorney, it can be a representative, but I'm not gonna deal with X amount of signers if I don't have to."

CA: Shoot. I'm in the middle of one right now. I've got six heirs and they're all married. So I have 12 signers. Lucky for me, two of my six heirs are attorneys, so they are the spokespersons for the family. I don't know that there's a number, but I would say that as a point of my business practice, I try to go back two or three, maybe four deeds just to check for maps or easements or changes or something like that. If the math isn't mathing, as we'll say, I will absolutely recommend to my clients to get a pre-listing title search done. For a few $100, usually, as long as it's not a historical one, like the one I mentioned earlier. Usually for a few 100 bucks, we can get a title search without the title insurance to really know what we've got. What about you, Sam? 

SB: When we work for a number of families that have, there's alive, there's family members that are alive, and then there's family members that have passed it. Now I'm dealing with their children. And what we have learned over the years is when anytime we get four or five heirs or family members is everybody's... All of our communication is with everybody. We may have one spokesperson, a spokesperson that we deal with, but we document everything to all of them. And we have found that if things come up down the road, they can't come back and say, "Well, we didn't agree to this or we didn't know this." When we've got email chains that document where they have communicated receipt of something that we've sent them anytime I'm... Even if it's not family heirs, if it's partners, when you start getting... When you get above four and start getting five and six and higher to... You've gotta be cautious about communications and being able to document that communication because you don't know what's going on behind the scenes and in time, you may figure out some of the chemistry within the group but don't ever read a book by its cover because it's you just don't know what conversations are being had that you're not privy to.

SB: So I just, anytime you're dealing with multiple buyers or sellers, be it heirs or partners, just be very cautious of your communication and being able to document stuff.

JO: Yeah, that's great advice. A great point over communication and documentation. Great advice there, Sam. Anything else you guys want to throw out to our listeners as we're wrapping up here? 

CA: I think just dot your I's and cross your T's and know what you're selling is the whole point of this, whether you're on the buy side or the sell side. Even as a buyer's agent, I'm checking a few different deeds. I'm looking at the chain of title. I'm trying to see if my buyers are gonna lose money because the sellers can't convey clear title. I'm sure we can all agree that not all realtors are created equal. So you can't always take the listing agent's word for they know who all the sellers are. So I just think document and better to do all of the research upfront and know that you can't put a deal together than to get everybody's faults, hopes up thinking that you can when you're not gonna be able to.

JO: Great point. Any last item for you, Sam? 

SB: One thing I would add to that is, and I agree with her 100%, due diligence, it doesn't matter what side of the deal on that you're on, is do your job and know what your client's getting into. And then one thing I would add because of the amount of of state work we've done over the years is, and this goes to the agents and whoever's listening, if you don't have a wheel, go get one tomorrow, because the heartache it will create and the issues that it will create by not having something that is so simple I don't care. You ain't gotta be worth a million dollars just if you've got assets and you've got a direction you want them to go in, go get a will. 'Cause if not the in Georgia, the state steps in and divvies out. So that's my big thing is, if you don't have a will, go have one made.

CA: Sometimes a good estate planning package can be a great closing gift.

SB: That can be... Here, here.

JO: Yeah, that's a great point. So many people, especially at young ages don't think about that. And somebody gave us that same advice, Sam, about, I don't know, it was probably 10 years ago or so, my wife and I, we were in our probably mid late 30s, I feel like it's when we did it and we had two young kids at the time we're like, "Will? We don't need a will. We're young. That's like what old people do." And somebody gave us that same advice, Sam, and talked us into it and it was so easy, so glad we did it. Didn't just put it in my trunk... Actually made sure the attorney had it and it's in our safe as well. But yeah, I totally agree with that man. Doesn't matter how old or how young you are, you need to have that to make things simple on the next generation, the people below you.

SB: Yeah. It's a gift to the people you're leaving behind. I mean, because it just creates a nightmare if there's not one in place. And what gets me is I have always been surprised by the people that you would think would know better. Older people that you would think... The professional people that you would think would know better that do not have a will.

JO: Yep. Well said. Before...

CA: Yeah, I mean, one last thing I will say, I'm gonna tag onto that. All good land pros have a good attorney. And one of the things that the attorneys that I work with on a lot of my land deals will do at closing for the buyer is go ahead and talk to them about that. My attorney will offer a discounted rate to people who perform closings with them for estates and wills and those kinds of estate planning packages. So talk to your preferred attorney and see if that's something that they're willing to extend an offer for for your clients.

JO: Great point. Great advice. Well guys, this has been a great episode and for our listeners out there, I want to make sure you realize that wild things can absolutely happen in a land transaction. And with this being our first episode of Dirt Debacle, I hope it's been educational and entertaining for you. If you are an RLI member and you've got a crazy story that you'd like to share, please get in touch with us and we'll consider having you on the podcast. You can go to RLIland.com and contact the marketing manager on the staff contact page. And for more expertise on land real estate topics, be sure to check out the RLI blog, follow us on social media, and of course, tune in for the upcoming episodes of the Voices of Land Podcast.

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