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Am I Digging too Deep into Chain of Title?2018-11-20T14:24:12+00:00

LandInvestors.com Forums **Ask A Question** Am I Digging too Deep into Chain of Title?

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  • Ellis
    Participant
    Post count: 22

    Hi guys. I’ve got a quick question for the community.

    How deeply does everyone dig into chain of title? Do you guys ensure title is “insurable” by a title company on the buy-side so that a future buyer won’t have any problems using a title company?

    I ask because I think I may be digging too deeply into title and destroying a perfectly good deal. Here’s the situation:

    The seller’s mother and father shared title to the property in 1964. The father passed in 1975 with no will. The mother quit-claim deeded her interest in the property to the seller in 1980. The problem is there’s no mention of survivorship rights on any deed. That means Texas intestacy laws apply. So, to cure title, I’m trying to file an heirship affidavit for the father along with a deed signed by the seller and her sister…sigh

    The thing is, the county has it as being in the seller’s name for 38 years now. Should I just draft the deed, have her sign it and move on? What would you guys do?

    Thanks in advance.

    Kevin Farrell
    Moderator
    Post count: 753

    Ellis – On vacant rural land, I would not have checked past the seller deed from 1980. If this is a buildable lot in a town I would close it with a title company. If the property is to be resold at $10,000 or more I would want to close the purchase with a title company. Sometimes you can know too much.

    You can probably just get the seller to sign the deed and move on. Good Luck.

    Ellis
    Participant
    Post count: 22

    Thanks for the response Kevin.

    Yes, the property is rural vacant land, and I think you may be right about getting it done and moving on to the next.

    Quick question: how many of your buyers for rural vacant land (less than 10k sale price) request to close through a title company? Have you run into many issues due to uninsurable title after having not purchased without a title company?

    Michael Aillon
    Participant
    Post count: 256

    Pay a title company to do a title check for about 100-150 bucks. This check basically says that it CAN be sold to you. Let them determine if clear marketable title can be passed to you.

    Kevin Farrell
    Moderator
    Post count: 753

    Ellis – I have only had a couple of people ask for title close when I was offering to self close. Usually when I explain it to them, they let me close it. I have not had any problems selling with a title company close after self closing the purchase. But it can happen if I miss something. The higher the cost, the more likely I am to use a title company. I just add the cost to the sales price and I make sure that I have enough meat in the deal to do that when I buy it.

    Michael’s suggestion is good if you are still concerned.

    Ellis
    Participant
    Post count: 22

    I appreciate both you guys input.

    Michael, I actually have had a search done, and I’ve had title companies tell me they won’t insure a property with a quit claim deed in the chain of title.

    Would you guys still buy it if it was a good deal? Have you purchased properties where the vesting deed was a quit claim deed?

    Michael Aillon
    Participant
    Post count: 256

    Just because there’s a quit claim is a bogus reason not to insure it. Look for another title company and ask if they will do it. If there’s a clear chain, I suspect someone will insure it.

    Luke Smith
    Moderator
    Post count: 1247

    Some of these title issues can be covered up with a bond too. Some of the title CO’s sell bonds and some don’t offer them. I have paid less than 20$ for bonds to fix title problems. Their cheap because the problem is not really a problem. Wish I could sell bonds like that in a big way. Probably huge profits but lots of ppwk per $. Land deals are better.

    Luke Smith
    Moderator
    Post count: 1247

    On another note I went a dozen deeds back today on one going back and fourth with the assessor and recorder. I was looking for access. Not the owner stuff. Found an old federal easement on microfiche. That sells the land.

    Milan
    Participant
    Post count: 460

    If it’s a great deal and title doesn’t want to insure, I still buy it. I mark it up substantially and seek on terms. I plan to hold these lands forever collecting payments. If the buyer manages to hang on and pay it off, I’ll record deed for him at the end. No title is involved.

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