I have a lot I am in the process of buying that has some title issues. As I've been working on closing the deal I've now been approached by a neighbor that would like to buy the lot from me and they know of the title issues. I've sent an email to my title agent asking this same question but I'd figure I'd ask here as well. Since I would not be able to get title insurance due to having to file to quiet title would I be able to have the current owner quit-claim to me and then I quit-claim to the neighbor? I can picture this working but at the same time don't want to do anything illegal or get myself in trouble down the road with something coming back on me.
Think of Quiet Title as "shutting up" someone from further claim.
Absent a court order quieting title, about your only practical choice is to get the former owner to release any and all interests.
If a community property state, you'll oribably need both spouses to sign which might complicate.
I understand what I need to do to quiet title. The previous owners are both deceased and there are no heirs apparent. The property was bought at tax sale and been issued a collector's deed. I put the lot under contract at a price I would be OK with sitting on for a year or two, because that's how long it could take for quieting title plus redemption period. I know have a neighbor that has contacted me that wants it for a price higher than what I am paying for it. My question is, since I won't be getting title insurance from the title company I would close with since the property is clouded can I just have the seller quit-claim it to me for price A and then I quit-claim it to my buyer for price B? The end buyer would then go through the process of quieting title which they are aware of needing to be done.
Basically, can I buy and sell this lot with title still being clouded? If so would quit-claiming it work or should I use another option?
Absolutely you can sell a property with title issues. The question is will someone buy it. The neighbor knowing the situation may be perfectly happy with defective title.
Personally I would try to sell with a quit claim deed and buy with as strong a deed as the seller will give me.
Ned Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/
Doing a bit more research I feel more comfortable now. I'll have my title agent write up a special warranty deed for the seller and I and a quit-claim deed for my buyer and myself.
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