December 11, 2015 at 2:17 pm #1350
MichelParticipantDecember 11, 2015 at 2:17 pmPost count: 199
So I just have a firm offer on a property I bought on a Tax Deed right before i got the program. I haven’t got through the whole program of DVD’s yet. I bought the 1 acre parcel 26 miles north of Orlando for $2300.00 and sold it for $7000.00. I’m sending the purchaser a purchase agreement this weekend, but nervous about the deed and how to fill it out. Can someone point me to the right DVD or comment with an example?
ChrisParticipantDecember 15, 2015 at 11:53 amPost count: 252
Thanks Steve @steve67
I’m actually curious to see how this turns out. I purchased a property from someone who had gotten it at the tax sale and they gave me a quit claim deed. I paid a wholesale price for it and had a title search done so I wasn’t so concerned.
But I’m curious if the buyer in this case recognizes that it won’t be a full warranty deed… or in my case, I were to sell my property, aren’t I obligated to let people know the property doesn’t have a fully clean and insurable title. I can see where the special warranty deed would be used, but if you’ve only owned the property for 30 days, how much are you really warranty-ing? Any defects are from previous ownership.
Does anyone know if this transaction is going through a title company? If so, wouldn’t they say it’s un-insurable until quiet title action is done, or a Tax Title Service does their research and is willing to insure it?MichelParticipantDecember 15, 2015 at 8:01 pmPost count: 199
Thanks for the information. I looked at some of the paperwork I printed for the land i bought and they do have a title search don on the property. I did see this before but wasn’t sure what was going on.MichelParticipantDecember 15, 2015 at 8:17 pmPost count: 199
@chris. Why would the buyer not get warranty deed or special warranty deed vs a quick claim deed? A warranty deed is one in which the seller, when transferring the title to you, warrants that he owns the property free and clear of all liens. A tax deed wipes out all liens of the property. In Florida, the county hires a title insurance company( In my case American Title Insurance Agency) was hired by Lake County. It is tru a title insurance policy does back up what you are stating in a warranty deed, but I think the tax deed legality protects you because everything and everyone is wiped out.
A quit claim deed gives no warranties. While it conveys whatever title the grantor may have, in executing a quit claim deed, the grantor is not representing that he owns the property or that he has the right to convey.
The only reason you would want to pay (or have the buyer pay) for the title insurance is if they plan to build on it. If they want me to present them the property so they can insure it then the only recourse you have is using someone like TTS who specializes in tax deeds.ChrisParticipantDecember 17, 2015 at 2:28 pmPost count: 252
I guess the point I’m trying to make is that when you get a tax deed, the title is not insurable. There is a cloud on the title. If someone wants to get a construction loan, put a mobile on the property, or use the land as collateral for any sort of loan, they won’t be able to get any future financing without title insurance. If he’s buying a 1 acre parcel, I assume he wants to build on it or a put a mobile on it. If he is financing the mobile home, they usually use the land as collateral.
Michel said: A warranty deed is one in which the seller, when transferring the title to you, warrants that he owns the property free and clear of all liens…
I think the tax deed legality protects you because everything and everyone is wiped out.
It doesn’t wipe out code enforcement or municipality type of liens.
And you don’t in fact know for sure there are no claims to the property. The tax deed will wipe out all lienholders and anyone with an interest in the property as long as they have been properly notified. Someone can still challenge the sale and say that the proper procedure was not followed.
If they weren’t, they can make a case that they still have a right to the property.
This is the reason why tax deeds are not insurable.
Michel said:While it conveys whatever title the grantor may have, in executing a quit claim deed, the grantor is not representing that he owns the property or that he has the right to convey.
I guess you make a good point there. A quit claim only transfers whatever right you may or may not have in the property.
My main point is, the seller should be aware there is still a cloud on the title, he won’t be able to get title insurance and he won’t be able to get any financing on the land unless he does quiet title or pays Tax Title Services.
As long as the buyer is aware of this, you’re good to go.
Tax Foreclosures create a serious blemish on a property’s title
When a property is foreclosed due to delinquent taxes – it creates a significant blemish on the property’s title – one that most title insurance companies will never insure over. As a result, it can be extremely difficult to sell a property that you purchased out of tax foreclosure, because if your buyer can’t get title insurance, they can’t get a mortgage, which means they can’t buy your property!
Many tax lien/deed investors, especially those new to the industry, are surprised to find out that after acquiring a tax lien/deed property, they have a title insurance problem.ChrisParticipantDecember 17, 2015 at 2:46 pmPost count: 252MichelParticipantDecember 17, 2015 at 7:56 pmPost count: 199
I agree with everything you said and I understand. I’m not using a title company to close the deal because I’m just offering the land as it is,but i do let the buyer know that if they want to build etc.,that they should inquire about using TTS. If they want this done before the sale, then the price of the land will go up to cover the cost. I’m not going to spend $1700(the fee for TTS,I called them) for a property I paid $2200.MichelParticipantDecember 18, 2015 at 1:23 pmPost count: 199ChrisParticipantDecember 18, 2015 at 3:27 pmPost count: 252
I guess my burning question is does a quiet title have to be done to perform a warranty deed? I have searched all kinds of information about deeds but they never say a quiet title is required for a warranty deed. look forward to the responses.
I’m no expert, (I’m really just a newbie with maybe 1-2 months more experience than you) but my guess is you can issue a warranty deed, but at the end of the day, if a buyer can’t get title insurance, it doesn’t matter if he gets a warranty deed or a special warranty deed, etc. The buyer would simply be getting a warranty deed that has a cloud on the title, which in my mind kind of negates the whole concept of any type of warranty.
My best analogy would be selling a car with a salvage title. The car may be 100% perfect, but the buyer will have trouble getting financing. You can offer a 1 year warranty on the car, but the problem is the bank’s perception of the car, not the car itself.
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