Quit Claim Deed cost me $1100. Is that right?

Question

Hello. I am BRRRRing a property. I purchased the property (for $100k cash) in my name and then quit to my LLC at refinance but was charged $1100 for the deed and doc stamps. Should I expect to pay this much every time I quit to an LLC? And should I have bought the property in the LLC's name instead of my own name?

Thank you in advance.

Patricia Steiner · Answer

There's a lot here that isn't right.  Start here:  "Transfers to a wholly owned entity (like a single-member LLC) are only exempt from documentary transfer taxes if there is no outstanding mortgage on the property. If there is an outstanding mortgage on the property, documentary stamp taxes are owed on the amount of the unpaid mortgage."  With no mortgage, you should not have paid doc stamps - it's a title play not a sale.

Then the Quit Claim:  it costs $10 to file the one page document; an attorney would charge $250 to complete or you can do it yourself by downloading the form.

Titling.  At some point you will want to do a deferred mortgage and get your cash (plus) out.  If you will be doing a Fannie/Freddie mortgage, the mortgage and property will need to be in your name. There are other lenders who can do the transaction for you in the LLC name.

My recommendation would be to challenge the doc stamps if you are the owner of the LLC.  You've already paid those. And, I would find another source to do business with in the future.

Congrats on your acquisition...