Understanding foreclosure and quit claim deeds

4 Replies

I found a foreclosed home and  it says quit claim deed. I know I have to pay off the back taxes on it and closing costs  but say if the listing prices is 200,000 and taxes I would have to pay on back taxes is 10k and closing costs 10k ; would I have bought a 200k house for 20k and I own it or would it be 20k and I would still owe 180k on the mortgage?

@Giovanni Luna   No you absolutely are not buying a $200K house for $20k

The price they are asking is just that, an asking price. The price you pay depends on your offer and what you and the seller agree to as a final purchase price. 

Whether there is a mortgage or not depends on you. If you have cash you pay cash,  If you want to borrow money then you have a mortgage for whatever amount you can borrow and you pay cash for the rest. 

The fact it is a quit claim deed does not mean anything regarding your questions. What determines the answer is the contract. The contract can say you pay the back taxes or it can say the seller pays the back taxes. 

Because it is a quit claim deed the title company needs to research the title and make sure it is good title and then they will insure the title.  This is the norm for any type of deed but is especially important for a quit claim deed.

@Giovanni Luna I will back up what Jay said.  Until you understand things better you really need to work with a professional that can guide you through these things.  Just make sure it is an agent that understands investment properties.  Most agent focus on selling pretty homes to people who want to live there. 

Watch for agents that are active here and from your area.  

“I found a foreclosed home...”, who is offering it for sale?

"It says quit claim deed...", is this an REO auction? QCD means you are inheriting All liens on the property, not just back taxes.....there could be outstanding mtg.s, code violation liens, judgments, on and on.....or it could have been a tax foreclosure...a whole different set of laws and traps.

Ditto, you need some help locally from someone who understands what you are looking at.