Somewhere Along the Chain a Link Broke...

So far in July, I have already received over 10 new Smoky Mountain foreclosure property assignments but today's was without a doubt the oddest.  To start with, the Sevierville area address (which isn't too far from my own residence) seemed easy enough but when I arrived, I was looking for house number 2019 which was nowhere to be found.  2017 was easy enough to find and the street numbers had been increasing so you would think that 2019 would be just ahead on the same side of the road but not so fast.  There wasn't a 2019 or any other house (just woods) until I went a good long ways up the hill when the numbers were suddenly in the 2500's.  Going back down and taking a second look, I double checked and sure enough, there were no houses of any sort beyond 2017.

With the aid of a tax map, the Sevier County Electric System office, and the kind folks at the Sevier County 911 addressing office, I learned that there are in fact two homes on this lot and that one of them is 2019. Armed with this information, I found that for some unknown reason 2019 comes before 2017 even though the street numbers before and beyond these two homes are all sequentially higher.  Sure enough, there was the house.  Unfortunately, from here the plot thickened even further.

Although there was nobody home at house #1 I was able to leave the required legal notices informing the occupant of the foreclosure and their rights going forward.  The occupant of house #2 was understandably dismayed when I explained that he would have to be prepared to move when the property was sold because his now former landlord no longer owned the property.  This afternoong I received a message from my office about a call from someone who said that they were the current owners of these homes.  A call to this person provided yet another twist.  He had in fact:
  • Signed a contract for deed
  • Paid $5,000 down as a non-refundable deposit
  • Made regular monthly payments for 3 years to the property owner
  • Made over TWENTY THOUSAND DOLLARS of improvements to the property
Sadly, this transaction in no way protected the "buyer" who had fully held up his end of the agreement.  Because of the "seller's" failure to make the payments to his lender, the lender did foreclose and now owns the property.  The "buyer" had paid over $50,000 but has nothing to show for this investment.  The only option for the person who made the payments is to consider suing the "seller" but there is little likelihood of any satisfaction being obtained there.

The lessons of this sad tale are many:
  1. NEVER lease a property from someone who isn't the property's actual owner of record.
  2. Use a professional attorney and/or Realtor to make sure that you are on firm legal ground.
  3. Be VERY cautious when using a contract for deed arrangement to purchase a property.
  4. Remember that in Sevier County street numbers don't always follow a rational progression.
The victims of the current wave of foreclosures are many but there are unheard of opportunities for qualified buyers who can see past this dark time to the bright future that lies ahead.

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