I know many people think buying and selling real estate can be expensive and wonder how can they reduce the costs. Some think they can do it themselves and save money on the commission. After all, what do Realtors really do for their fat fees?

Some people who pay cash may figure that they don't need title insurance because that's just a big ripoff since the home must have had it before. Still others figure they can save money by forgoing inspections because they know enough about construction.

While in some cases, the above may be true you are playing Russian roulette with a loaded gun. I go by something called Schwartz's Law, which simply says Murphy is an optimist. While I'm a positive type of guy, I'm always on the lookout for something to go awry. This way I rarely find myself surprised.

Well, around a month ago, one of my clients came to see me and asked if I could help him buy the adjoining lot to his family's home, which just came on the market. Because the lot was substandard and not likely buildable, it wasn't listed for a lot of money.

The client asked me to write up an all-cash offer with no contingencies and a two-week close of escrow. My initial thought was how nice of my clients to come back to me for assistance and what an easy deal. It wasn't a lot of work nor a lot of money. I also thought how great it was to have something easy and quick instead of all the drawn-out deals with banks that don't want to make loans.

Or so I thought.

All of a sudden, we saw the title report on the property showing chain of ownership going back almost 100 years. Normally this is kind of interesting if you have nothing to do and can't sleep. But a huge problem turned up. It seems the current owners bought this little lot from the Ocean Shore Railroad Company in the 1900s but never had the grant deed recorded. The tax assessor showed the property in the "owner's" name and he have been paying property taxes ever since.

The title company did a lot of research but refused to provide title insurance because there was a break in the chain of title of ownership. What the company wanted was for the current owners to initiate legal action called a quiet title suit to prove ownership.

The only problem with this was that the cost of the legal fees and several months of time actually exceeded the sale of the property. So, in effect, the sellers would have to pay money out of their own pocket in addition to paying the lawyers and Realtors. And who in their right mind would do that?

After a lot of conversations between two attorneys, the other broker, my client and the title company, we came up with a solution. The title company would issue title insurance with the exception of the change of ownership from the Ocean Shore Railroad to the current sellers. There was also an adjustment in the price because the buyers were not getting exactly what they expected. But since they didn't pay much money and only wanted to use this additional parcel to make their yard bigger, it was worth the risk.

The risk to the new buyers is that the defunct Ocean Shore Railroad could try and sue them to take back the 3,500-squre-foot piece of land. Since the company is out of business, that likelihood is very low.

It just goes to show that even what you think is going to be easy can turn into a disaster very quickly and unexpectedly. For those out there who think they know everything, here's one more little reminder that things are best left to the professionals who deal with these issues routinely.

Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at 726-6346 or at www.century21sunset.com

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