Rental Property Investor · Milwaukee, WI · Member since 2016 · 90 posts · 11 votes
Submitted an offer last night for an investment property in Milwaukee (a duplex), and the Seller countered with this:
Conveyance of Title: Upon payment of the purchase price, Seller shall convey the Property by Quit Claim Deed without warranty of title.
I know this is the weakest of deeds, but I don't know much else about this... Could someone else potentially have claim to the property? How can I protect myself? Why would they request this, and should I not be accepting this counter due to it?
The seller knows, or suspects, he doesn't have clear title. Do you want to buy his problem? If not, only do it by normal transfer/warranty deed, with title insurance. You might just ask him why, for education/entertainment.
The seller knows, or suspects, he doesn't have clear title. Do you want to buy his problem? If not, only do it by normal transfer/warranty deed, with title insurance. You might just ask him why, for education/entertainment.
@Wayne Brooks Thanks! Seller is actually a bank. Would this explain anything else? I'm asking my realtor to ask why they want a Quit Claim deed. Hoping to get resolution - great price on the place - just figuring out if it will still be worth it.
Thanks, guys! I'll keep you updated... Just don't want to somehow get left picking up the tab on something or never getting title. I guess my bank would have certain requirements too since I'm financing it?
zit think you need to identify the threats and mitigate the risks of those threats to your satisfaction.
Bank personnel are unlikely to be trying to pull any clever maneuvers however I used to frequently run into a guy at a local sushi bar. He owned a bank and was quite impressed with himself. It wasn't until I saw him featured in a 60 Minutes expose' that I saw his big a fraud he was.
Title company will list their exceptions to title and you can choose to close subject to any of the exceptions. If you are keeping this property in your portfolio then a few pimples and warts on title might be worth a bargain deal.
I'm waiting to hear from the bank, and I'm also doing some research on my own... But I can't quite figure out what risks I would face with a quit claim deed. Any examples?
update from seller: The bank acquired the property through a sheriffs deed. So as a foreclosure it went to a sheriffs auction and the bank took it over.
How do I ensure I get a clear title? So as long as I can get title insurance, I will be fine?
IMO, if you can get title insurance you will be fine. Ask any title company for a Preliminary Report, not too expensive and be sure to ask re insurable??
So it's an REO sale post judicial foreclosure? Easier than a foreclosure auction as you don't gave the tine compression issues and lender/owner should cooperate with title insurance.
Now the condition of title should essentially be whatever the condition of the title that existed when original loan was made that pledged this property as collateral.
Add any outstanding property taxes or code enforcement liens and that should be the only exceptions to anticipate, and you can negotiate who pays those.
Forgot the quit claim deed! Not getting title insurance is generally not a good idea. At least run an O and E to get an idea of what is going on with the property. But I highly recommend to proceed with caution.
Defects in title are instances in which someone else has some type of claim to your property that could impair your rights to the property.
The type of title coverage you buy determines the types of title defects for which you will be covered.Title insurance covers you and, in most cases, your lender against defects in the title of your property.
Owner's coverage protects the buyer of the property's interests if a title problem comes up. While lender's policies typically contain an extended level of coverage, the owner's coverage comes in standard or extended forms. An extended policy, also referred to as an ALTA, for American Land Title Association, policy, covers you against many more risks.
Unpaid property taxes are not included in O&E Reports. A tax certification provides current status of property tax payments.
O&E reports are not tittle work and should never be used to determine whether to purchase a property or to determine the priority of a new anticipated loan
In Maryland and I suppose many other States, generally you can't get title insurance for a Sheriff's Sale or tax sale property for a period of time (at least 3 years). That is why the Bank is selling the property by Quit-Claim deed. It is selling the property to you and putting you on notice that the sale is not dependent on you obtaining title insurance.
@Rich Baer thanks! What is the process of securing a clean deed after this time? Am I always going to have problems reselling the place? Also, where can I find any past due taxes or what not - the county assessors office?
The bottom line is that when you buy it the Title Company or Lawyer will do a title search. If the search is clean you are fine. Buy it if it works for you. I say that ONLY if you are keeping it as a long-term investment. Time will cure the Sheriff's sale issue. If you were looking to resell in the near future you would have a problem in that your Buyer may not be able to get title insurance.
what's o and e? Tried looking it up, but I'm not sure I'm getting the right results.
I think @Antonio is referring to what we call in Wisconsin as a Title report. As an REO Broker for the past 10 years, never heard it referred to aa O&E, Quit Claim is standard with an REO, Just get an Owner Policy and you will be fine, if you are concerned, pay for a Gap Endorsement as well, I nevr do, but I abstract my own title as a back up. Good Luck
Casey Kooiman , very simple steps to do: contact a title company and ask them to run a title search (report). The title company will search any record of liens/debt owed on the property. And then see if you're willing to live with the result. If you have a hard time finding a title company that will work with you pm me I'll be happy to put you in contact with the one I'm working with.