Posted by Bill H on November 23, 2006 at 15:14:21:
Common definiton is:
“A title to real estate that is free and clear of liens or other title defects; a title that enables an owner to sell the property freely to others and which others will accept without objection.”
Good Luck,
Bill H
Definition of “Marketable Title” - Posted by JaimieS
Posted by JaimieS on November 23, 2006 at 11:29:25:
In reading some of the Posts on this wonderfully helpful website, I am curious as to what the legal definition of “Marketable Title” is. Specifically, If someone is selling a property and there is more owed against the property than the proceeds of the sale,would this be considered NOT having marketable title? Now I realise that in a perfect world, the seller would bring the diffrence, in cash, to the closing table, but believe me, my seller can’t do that. My seller is saying that because she doesn’t have “marketable title” our deal is off(and the purchase agreement seems to support her position)Should I just move on? I can’t get blood out of a turnip as the saying goes,but is a purchase agreement void then? There is no legal recourse on my end? This particular purchase agreement states that the agreement is void if title is not marketable,and doesn’t say that she has any obligation to try to make it marketable(maybe negotiate a short sale?)If she has even $1 equity does that mean it is legally a “marketable title” ?I would like to know for future reference. Thanks
Re: Definition of “Marketable Title” - Posted by David Krulac
Posted by David Krulac on November 27, 2006 at 23:36:12:
There can be several solutions to the problem.
A short sale where the lender accepts less than is owed because as you can demostrate by your purchase of the proerty and hopefully an appraisal, the proeprty is not worth the debt value. You would have to have a convincing argument probably with pictures and market data.
The lender can accept what proceeds are available, release the mortgage (or other lien) from the property and keep the debt on the seller either with a substitution of collareral or as an unsucured loan.
Law Dictionary definition - Posted by John Merchant
Posted by John Merchant on November 27, 2006 at 15:19:18:
Gilbert’s Law Dictionary ('94 Pocket Ed.) says: “Title to property which is free from reasonable objection from a reasonably well-informed purchaser exercising ordinary business prudence. Courts may force a purchaser, who has contracted to purchase the property, to accept a marketable title, even if it’s not perfect”
In any court action to make buyer buy the RE, the issue to be determined by the court would absolutely include the “reasonable” modifier…and where a title co. would insure the title, my guess is very few experienced lawyers would be willing to second-guess the title co. so that balking buyer would normally be court ordered to go ahead and buy.
BUT, BUT, BUT IMHO, it’s almost never smart of the Seller to sue to require the Balking-Buyer to buy and I know of no lawyers who disagree with me on this.
Much smarter to let the BB disappear and spend your money finding a good buyer.