Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
We bought an REO in Saginaw that was an Agreement for Deed/ Land Contract that the tenants were evicted in the past. We could not sell it due to not getting a quit claim deed from the prior owners. We finally tracked them down and we actually ended up arranging to sell it back to them for a little more than we paid vs taking a loss due to the property being partial stripped in the mean time.
My question is I can get a HUD mortgage and use that with a HUD note, or we can do another Land Contract or Contract for Deed. We do want to be able to take the property back easily if they miss the payments.
Any suggestions as to what we should use? Land Contract, Contract for Deed, or Mortgage.
Real Estate Agent · Novi, MI · Member since 2016 · 12 posts · 3 votes
10y
Hi Christopher Winkler - thanks for that information. I actually need a good real estate attorney. I'll check them out.
Also, Rick Maningas , a quit claim deed is the worst type of deed you can get lol. It literally says "I give up any interest I MIGHT have in this property and I don't even know if I own it"... There was a guy selling quit claim deeds for lots on the moon and people were buying it! I could give you a quit claim deed on your neighbors house, it doesn't mean I own or have any attachment whatsoever.
Further, a title company will never give you insurance if you have a QC. It's used more between a mother and son, for example. If your mom gave you her house with a general warranty deed and there was a cloud, for example, you wouldn't sue her; so, you might ask for a QC (same effect).
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
10y
A Land Contract can but will not always make it easier to reclaim a property after default than foreclosing. There are times when you would need to foreclose even with a land contract in place. I am not a lawyer. I recommend you consult one familiar with Michigan law so that your contracts are written properly.
Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
10y
Thanks Jeff, Yes, we are going to use our favorite firm, Potestivo & Associates P.C., 251 Diversion Street, Rochester, MI 48307, if anyone needs a good Michigan Real Estate Attorney... I think doing it online at Lawdepot.com is a big mistake.
Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
10y
FYI, we have found out the hard way, a CFD is not a simple "eviction", we always have to get Quit Claim Deeds from them on every single one that was vacant or had to foreclose. The recent one in Alabama, we paid them $1,000 to leave it broom swept clean and to sign the Quit Claim...
Flipper · Milwaukee, WI · Member since 2016 · 66 posts · 12 votes
10y
In Wisconsin our title company is very adamant that quit claim deeds are to be used under extreme caution. Who ever is giving you a quit claim deed is just giving you whatever rights and conveyances (I believe I am using the correct term) they have. This can include any city back taxes, violation code fees, water bills, utility bills, liens, judgments, etc. Therefore, you could be given a house for $1.00 but there are $20,000 of junk attached to the house that will now be your responsibility when you record that quit claim deed. My title company would do a full title search and city special assessment search to confirm it is a clean title and I would probably want a title policy if I were to accept a quit claim deed.
Real Estate Agent · Novi, MI · Member since 2016 · 12 posts · 3 votes
10y
Hi Christopher Winkler - thanks for that information. I actually need a good real estate attorney. I'll check them out.
Also, Rick Maningas , a quit claim deed is the worst type of deed you can get lol. It literally says "I give up any interest I MIGHT have in this property and I don't even know if I own it"... There was a guy selling quit claim deeds for lots on the moon and people were buying it! I could give you a quit claim deed on your neighbors house, it doesn't mean I own or have any attachment whatsoever.
Further, a title company will never give you insurance if you have a QC. It's used more between a mother and son, for example. If your mom gave you her house with a general warranty deed and there was a cloud, for example, you wouldn't sue her; so, you might ask for a QC (same effect).
Real Estate Agent · Grand Rapids, MI · Member since 2014 · 493 posts · 200 votes
10y
Hi Christopher: Good questions. I can't specifically answer the HUD question but can address the others a little. In Michigan, contracts for deeds are land contracts. As Jeff noted, the land contract foreclosure process can be time consuming and, ultimately, if the buyers pay up--you are still stuck with them. In other words, the buyer can default again right after making good on the payments and you'd have to start all over again. Which isn't to say a mortgage foreclosure wouldn't have the same result, but the mortgage foreclosure process is faster and, at times, easier. (Of course, Dodd-Frank regulations are going to dictate how many of these you can do and whether or not your buyers qualify to buy on a land contract. Michigan includes land contracts under the Dodd-Frank regulations.)
Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
10y
Thanks @Clay Powell, i think in this case we will go with an attorney from MI to draft these and not an online source, which is not state specific and needs an attorney to review anyway.. I think its less to have them use a prior template than review a new doc.
Flipper · Milwaukee, WI · Member since 2016 · 66 posts · 12 votes
10y
Yes @Kevin George that is why I never deal with a quit claim deed. I was considering one once and my title company went over all of the reasons why not to. At some point in the conversation I stopped listening because I had heard enough.