From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1525 topics, 14456 posts — Last Post 04/24/14, 05:44AM

BiggerPockets Exclusive PRO Area

117 topics, 841 posts — Last Post 04/23/14, 08:28AM

New Member Introductions

10986 topics, 86570 posts — Last Post 04/24/14, 05:32AM

Real Estate Success Stories

399 topics, 6213 posts — Last Post 04/24/14, 01:08AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5993 topics, 47218 posts — Last Post 04/24/14, 05:24AM

Renters

650 topics, 5861 posts — Last Post 04/23/14, 07:39PM

Get Foreclosure Help - Help Stop Foreclosure Forum

317 topics, 2561 posts — Last Post 04/23/14, 08:28PM

Home Owner Association (HOA) Issues & Problems Forum

238 topics, 1611 posts — Last Post 04/23/14, 04:02AM

Do it Yourself

658 topics, 6316 posts — Last Post 04/23/14, 09:50AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3709 topics, 29747 posts — Last Post 04/24/14, 05:07AM

Real Estate Guru, Book & Course Reviews and Discussions

1139 topics, 11600 posts — Last Post 04/24/14, 04:53AM

Ask About A Real Estate Company

743 topics, 7344 posts — Last Post 04/22/14, 11:25PM

Real Estate Investing

Real Estate Strategies

Wholesaling

5637 topics, 43962 posts — Last Post 04/24/14, 05:22AM

Rehabbing and House Flipping

3353 topics, 31105 posts — Last Post 04/24/14, 05:49AM

Real Estate Development & New Home Construction

554 topics, 4694 posts — Last Post 04/22/14, 09:17PM

Innovative Strategies

705 topics, 6044 posts — Last Post 04/22/14, 04:06PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

867 topics, 6693 posts — Last Post 04/24/14, 03:16AM

Rent to Own a.k.a. Lease Purchase, Lease Options

699 topics, 4942 posts — Last Post 04/24/14, 05:49AM

1031 Exchanges

143 topics, 1062 posts — Last Post 04/22/14, 03:21PM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1691 topics, 11313 posts — Last Post 04/22/14, 09:26PM

HUD, VA, and Tax Sales

416 topics, 3103 posts — Last Post 04/23/14, 02:29PM

REOs

1217 topics, 10603 posts — Last Post 04/23/14, 08:46PM

Short Sales

1539 topics, 13154 posts — Last Post 04/23/14, 08:25PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7252 topics, 71192 posts — Last Post 04/24/14, 05:46AM

Mobile Homes & Mobile Home Park Investing

639 topics, 5146 posts — Last Post 04/24/14, 05:13AM

Investor Basics

Starting Out

7733 topics, 60690 posts — Last Post 04/24/14, 05:41AM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4730 topics, 37326 posts — Last Post 04/24/14, 02:18AM

Real Estate Investor Marketing

1738 topics, 14148 posts — Last Post 04/23/14, 08:20PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1413 topics, 9013 posts — Last Post 04/24/14, 12:59AM

Multi-Family and Apartment Investing

1123 topics, 9396 posts — Last Post 04/24/14, 05:24AM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

645 topics, 4913 posts — Last Post 04/24/14, 05:42AM

Business Basics

Goals, Business Plans & Entities

833 topics, 7585 posts — Last Post 04/23/14, 08:58PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2802 topics, 20136 posts — Last Post 04/23/14, 06:57PM

Property Insurance

311 topics, 2057 posts — Last Post 04/23/14, 01:20PM

Personal Finance Discussion

330 topics, 2754 posts — Last Post 04/22/14, 12:06PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2852 topics, 19848 posts — Last Post 04/24/14, 02:50AM

Creative Real Estate Financing

1221 topics, 8860 posts — Last Post 04/24/14, 02:09AM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1216 topics, 8025 posts — Last Post 04/24/14, 05:37AM

Bankers, Lenders, and Mortgage Brokers

442 topics, 1931 posts — Last Post 04/23/14, 09:04PM

Contractors

269 topics, 1690 posts — Last Post 04/22/14, 07:33AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

2017 topics, 11758 posts — Last Post 04/23/14, 10:03PM

Americans & International Real Estate

162 topics, 572 posts — Last Post 04/24/14, 03:31AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

65 topics, 439 posts — Last Post 04/22/14, 09:27AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15085 topics, 54135 posts — Last Post 04/24/14, 04:15AM

Real Estate Events and Happenings

168 topics, 2606 posts — Last Post 04/23/14, 10:05PM

Off-Topic

Off Topic

Off-Topic

2907 topics, 32445 posts — Last Post 04/24/14, 05:30AM

Housing News & Real Estate Market

920 topics, 8391 posts — Last Post 04/23/14, 02:43PM

BiggerPockets Real Estate Investing Summit

97 topics, 1752 posts — Last Post 04/23/14, 04:51AM

BiggerPockets Resources

Forums » Rehabbing and House Flipping » Limited Warranty Deed? Need some help

Limited Warranty Deed? Need some help

6 posts by 4 users

Signup


Hello, I am buying a house from a local bank as a limited warranty deed. I'm a bit confused why not as a general warranty deed. Are they trying to hide something? Should I request I get a warranty deed instead of limited? Any thoughts would be grateful. Thank you.



SFR Investor · Wheat Ridge, Colorado


REOs are often sold with less than a full general warranty deed. Buy title insurance. They won't give you a general warranty deed.


Jon Holdman, Flying Phoenix LLC


Real Estate Investor · Ellicott City, Maryland


As Jon said, Limited Warranty Deed is standard for REO sales. The difference is basically that the seller is only warranting their time of ownership of the property, but title insurance should cover most issues during any gaps.


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook



Ok, so I am safe as long as I get title insurance most likely? Thank you guys.



Real Estate Investor · Ellicott City, Maryland


Originally posted by Greg P.:
Ok, so I am safe as long as I get title insurance most likely? Thank you guys.

Yup!


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Real Estate Investor · State of Florida, Florida


I would say the majority of banks use what is called a "Special Warranty Deed", which sounds "less threatening" than a deed called a "Limited Warranty Deed".

(...or maybe some states use a "limited warranty deed" while other states use a "special warranty deed"? All the banks I've done REO deals here in Florida use "special warranty deeds"!).

My last 50 properties from banks:

47 - via Special Warranty Deed
3 - via Quit Claim Deed

Banks seem to "have a fear" of exposing themselves to extra liability when they sell REOs,

so banks, in their wisdom, mostly use Special & Limited Warranty Deeds in lieu of a regular Warranty Deed when transferring title on REOs.

Banks also use "special addendums" or added language in the "additional terms section" of a real estate sales contract to even further insulate themselves from liability.

Sometimes an investor can use the bank's paranoia and fear of liability to their advantage:

I recently purchased (3) REO vacant lots from a major bank (BB&T). I submitted my offer, as I usually do, but this time the bank said they would only sell these three properties to me via a "Quit Claim Deed".

The problem was, almost all title insurance companies will not get involved with title work and not issue title insurance, if a "Quit Claim Deed" is used to transfer title!

I really wanted these (3) lots, so I "dug deep" into "chain of title history" to see just why a bank would refuse to sell me these lots only via a "quit claim deed"?

I learned that these three lots were part of a huge group of properties that were "Quit Claimed" to BB&T Bank from a land developer via a "Deed-in-Lieu of Foreclosure" agreement.

And I further noticed that the title company used was owned by this land developer, and the "Deed-in-Lieu of Foreclosure / Quit Claim" documents were drawn-up by the land developer's own lawyer (...who was also the lawyer for the title company! Yikes!).

Now I kind of understood BB&T's motive in wanting to transfer these lots only via a "Quit Claim Deed". But that didn't help me much as I would have to buy these (3) REO lots without title insurance, ...and that did scare me!

So here's what I did: I convinced a title insurance company (who uses their own "in-house searcher" to do the title searches as a "prelude to getting a property underwritten for title insurance issuance.") to do a free title search for me, with the understanding that they would get the "back end" title work from my end buyers.

So this small town title company said ok! They did the search, and then they made their money by closing these (3) lots to two end buyers with title insurance!

They did that only days after the BB&Ts "quit claim deed" was filed and these 3 lots were transferred to me. So in other words once the property was in my name (regardless of obtaining them via a "quit claim deed" or not), I was able to sell them right away, via a full warranty deed with title insurance to my ebay buyers.

So I bought the (3) REO lots from BB&T Bank, without title insurance (and zero closing costs I might add!). So just a few days after I closed with the bank (of course my title company requested to review the "quit claim deed" and make sure it was drawn up correctly by BB&T Bank's lawyer, with proper legal descriptions, etc. And all was indeed ok!).

I resold the lots with full title insurance, thanks to this small title company!

So all worked out perfectly for me.

But I hope I never have to buy another REO property via a "Quit Claim Deed"!

LOL!

Bob
Land Rescue League, LLC





Sign up