Mistake # 51: Review the legal description on all legal documents

Mistake # 51: Review the legal description on all legal documents  

Jose and Patricia purchased a property using cash. A year later, when they approached the idea of building another structure on their property, they were told that they did not own the property in its entirety.  On further investigation they found that the deed of trust did not include the legal description for one of the lots.  This meant that, although they believed they had bought the entire property (based on what was advertised via the MLS), their sales contract actually reflected something different. When Jose and Patricia contacted the owner of what they thought was their property, the owner was agreeable to transferring the title into the couple’s names. This situation could have turned out much worse; instead of an expensive legal battle, Jose and Patricia had only the cost of transferring the title into their names. So something as simple as not noticing the legal descriptions in the sales contract and the deed of trust could cost buyers thousands!

Jose and Patricia made several mistakes:  They came unrepresented at closing so they only had themselves to rely on to verify the paperwork.  They also failed to double check the legal description against what was being advertised for sale in the MLS, and against the survey and the tax records. If they had, they would have noticed the discrepancy. Because Jose and Patricia had very little experience in purchasing real estate, they didn’t understand how important it is to check the legal descriptions.  

The legal description shows up on the three most important documents: the notes payable, the deed of trust and the Settlement Statement (HUD-1), along with other supporting disclosures, such as the sales contract and the survey. Pay close attention to any and all documents that state the legal description and require your signature.