Bank Financing on Land 101 (LA 1569)
Transcript:
Jack Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala.
Jill DeWit:
And I'm Jill DeWit, broadcasting from sweet Scottsdale, Arizona.
Jack Butala:
Today, Jill and I talk about bank financing on land 101. You have a great deal, you don't have enough money. Or you already bought a piece of property with your own money or any way else, and you're going to want to sell it to somebody who's going to go to a bank and get financing. We're seeing that a lot now.
Jill DeWit:
I would like to pause for a moment and just talk about, for those of you who are not watching, I just got stopped with the funniest comment which was, Jill, where's the bottom of your blouse? You can't tell, it looks like it goes way down on the screen. It's there, it exists.
Jack Butala:
Then I said, is that okay? And then I corrected myself and said-
Jill DeWit:
Might improve our numbers.
Jack Butala:
Yeah, that's where [inaudible 00:01:01].
Jill DeWit:
Let's see what Jill's wearing today.
Jack Butala:
Before we get into it, let's take a question posted by one of our members on the landinvestors.com online community. It's free. And if you're already a Land Academy member, please join us on Discord.
Jill DeWit:
Vic wrote, "I have a closing next week and there is physical access, but it's via a private road. The title company [inaudible 00:01:27] the following in the exception sections, that would be called schedule B, and I wanted to see if that clause is normal and if it would be a problem for me when I'm selling the property."
Jack Butala:
Like always-
Jill DeWit:
I was looking for the comment.
Jack Butala:
Like I said, there's a lot of comments on this.
Jack Butala:
Here's my take on it. The vast majority of schedule B exceptions on title policies say we don't ensure the fact that this property has access.
Jill DeWit:
Good, bad, or otherwise.
Jack Butala:
Yeah. That's just-
Jill DeWit:
We're not going to promise anything.
Jack Butala:
They don't even check it. It's just a sentence that they include in there among several other things that the title policy doesn't-
Jill DeWit:
Cover.
Jack Butala:
Yeah, it doesn't cover. So, no, I wouldn't. This doesn't concern me at all. I would check out the physical details of the private road. Is there a gate? That might cause some problems. That may change your mind. If the private road is maintained by a neighbor and the access to your property is through that private road, if this is actually the truth and it's not just template language in the schedule B title exception for the title policy, that could pretty dramatically affect how people get there to see the property to see if they want to buy it. And/or if they do buy it and somebody puts up a gate because it is their private road, that's a problem.
Jill DeWit:
I think there's two kinds of private. There's your neighbor's private road, and then there's the public utility. There's APS, the power service private road. So you have to do some digging.
Jill DeWit:
I was going to add, I had this come up yesterday, and people say things, too. You have to really do your own homework. Don't believe everything that one person says. Someone said, "Oh, that's a private road," and now you're believing it. It might not be true.
Jill DeWit:
An agent came up, we have a property that we're selling ourselves, and we got a phone call from an agent in the area who said, "I'd love to help you guys sell this property." We put a sign in the ground and she obviously saw it and called the sign. She told my transaction coordinator, "By the way, because it's only a half acre, you need an acre to build in this area." But she's all excited to list and sell the property. I'm like, I'm not sure I believe her. And so my transaction coordinator passed that on and I said, that's nice.
Jill DeWit: