Another Novice Homebuyer Gets Screwed Over In Land Contract Deal; Sinks $15K Into Property Rehab, Now Faces The Boot Over Undisclosed Title Claim

In Racine, Wisconsin, The Journal Times reports:

• After transforming a hovel into a source of neighborhood pride, Noelia and Joaquin Raygoza have been ordered to leave. Not long after moving into a house they had agreed to buy at 1404 Buchanan St., the couple began receiving eviction notices - in someone else's name. Because of an apparent mix-up with an old foreclosure, the Raygozas and two grandchildren are the ones scheduled to be tossed out in a week.

• That's a big blow to a family that spent much of the past seven months turning it into a habitable place, upgrading plumbing, repairing sidewalks, putting in floors and more. They remember hauling out 14 loads of garbage, too, all to the relief of neighbors.

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• In January, the couple signed paperwork to buy the property for about $26,000. A company called Original Resources Inc., based in San Jose, Calif., entered into a land contract that was supposed to transfer full ownership to the Raygozas after a two-year probationary period. Noelia and husband Joaquin, 53, moved in along with grandsons Sergio, 21, and Eric, 18. [...] Family members are skeptical that they'll get back what they put into the house. They put profits from previous sales and other savings toward the estimated $15,000 in renovations.(1)

For more, see Fixed up, then forced out? - Mix-up threatens family's eviction after extensive renovations.

For story update, see Family gets month reprieve from eviction over mix-up:

• Noelia Raygoza said someone from Original Resources Inc., the California company that sold [the couple] the house, planned to arrive here soon to help sort it out. She also plans to meet with Legal Action of Wisconsin(2) for possible legal assistance.

(1) In all likelihood, the novice homebuyer failed to either obtain a title insurance policy or otherwise check the status of the property title, including the status of any unsatisfied liens, or other clouds on title / title defects that may require the filing of a lawsuit to clear up. See generally, The Quiet Title Lawsuit; Fixing Title Defects in Real Property.

This story provides a good example of what can happen to a homebuyer who begins sinking in cash and sweat equity into a home without first getting legal advice or doing any due diligence when attempting to buy the property.

(2) According to their website, Legal Action of Wisconsin is a non-profit law firm with offices in six cities serving 39 southern Wisconsin counties providing free legal representation for low-income people.