Accept a quitclaim deed sale?

Question

Is it okay to accept transfer of a raw land parcel from a seller who obtained it through a quitclaim deed from the county treasurer. A quick google search shows that I am not guaranteed that the seller actually owns the property or that the title is free and clear. How do I verify that I am actually getting ownership of this property and why type of deed transfer should be used? How do I check the title of the parcel is free and clear?

Antonio DeFlorio · Answer

I don't want to pretend to be an expert. I have just done research into tax sales in MI because they are often vacant land in the northern part of the state, I personally have not purchased via a tax sale.

I'm going to hazard a guess the state uses QCDs because you aren't purchasing property per se, but paying off the tax debt. In exchange, you are given the property rights the state uses as leverage for back taxes. The state's priority is rectifying the tax delinquency, they have little care for deed because the tax debt trumps all liens (except environmental). Regardless who owns the property, the taxes were delinquent and the same process would be executed.

Brent Coombs · Answer

I'm curious, if everything is above board regarding prior-ownership and Lien extinguishment, why would the Bank or County (or anyone) EVER use a Quit Claim Deed? (Which after all, were originally intended to be written by individual FAMILY members to show legal disinterest to all the other FAMILY members / joint owners! ie. NOT for "outsiders"!)

Just how many extra dollars are we talking about to get a QC converted into a "Warranty Deed" when it comes YOUR turn to sell? Or is it really just taking a pot-luck gamble - every time?

Jerry W. · Answer

I would only take a quitclaim if I knew the title history.  Get title insurance.  It is very cheap compared to the potential loss if you end up having a title problem.

Ned Carey · Answer

@Bryan Blancke You are right about a quit claim deed. It guarantees you nothing. However, you should do all settlements through a title company and get title insurance. They will research to make sure you are getting what is agreed to in the sales contract. The contract should say something like "free and clear insurable title."

If you are unsure just run the contract by an attorney before signing anything.

Antonio DeFlorio · Answer

I assume the property was purchased at a tax sale? tax-info.com runs most of the tax sales in Michigan. If so, liens are extinguished unless environmental liens from DEQ. No prior owners can claim rights after a tax sale, all previous title rights are extinguished. Here is a link to tax-sale.info FAQs that may help you, it answers a lot of questions:

https://tax-sale.info/faq