Desperate to sell - quit claim deed for $2000

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Desperate to sell - quit claim deed for $2000

Fernanda B.
Peoria, IL · Member since 2017 · 17 posts · 7 votes

I'm helping a friend sell a house. He bought this property in 2008 and rented it to someone he felt he needed to help. The tenant has been living there ever since. Turns our he's a bad tenant (surprise? no.). 

My friend is moving to another state and just wants to get rid of that house, but doesn't want to go through the eviction process. The tenant doesn't want to leave, but is not exactly paying on time. I suggested we would try and sell it as tenant occupied. 

The place doesn't have many pictures because the tenant has so much stuff in there it's difficult to see anything, but we managed to have pictures of the roof, foundation, water heater and the outside. 

At this point, he wants to do a quit claim deed for $2000 and get done with it. Taxes are around $500. 

In this scenario, can I expect to find a buyer who's willing to deal with this? How can I increase my chances of selling?

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Deanna McCormick
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
8y

Why don't you buy it.. only 2 K.. then you non-renew tenant file eviction if he's not out in 30 days and clean it and FLIP it yourself.

6Reply
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  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    8y

    Why don't you buy it.. only 2 K.. then you non-renew tenant file eviction if he's not out in 30 days and clean it and FLIP it yourself.

    6Reply
  • Fernanda B.
    OP
    Peoria, IL · Member since 2017 · 17 posts · 7 votes
    8y
    Originally posted by @Deanna McCormick:

    Why don't you buy it.. only 2 K.. then you non-renew tenant file eviction if he's not out in 30 days and clean it and FLIP it yourself.

     I don't want to deal with that either, honestly. I've been saving money for my next deal and it will be a large down payment.

    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    8y

    @Cody Evans found you a house haha

    1Reply
  • Fernanda B.
    OP
    Peoria, IL · Member since 2017 · 17 posts · 7 votes
    8y
    Originally posted by @Account Closed:
    Originally posted by @Fernanda B.:

    I'm helping a friend sell a house. He bought this property in 2008 and rented it to someone he felt he needed to help. The tenant has been living there ever since. Turns our he's a bad tenant (surprise? no.). 

    My friend is moving to another state and just wants to get rid of that house, but doesn't want to go through the eviction process. The tenant doesn't want to leave, but is not exactly paying on time. I suggested we would try and sell it as tenant occupied. 

    The place doesn't have many pictures because the tenant has so much stuff in there it's difficult to see anything, but we managed to have pictures of the roof, foundation, water heater and the outside. 

    At this point, he wants to do a quit claim deed for $2000 and get done with it. Taxes are around $500. 

    In this scenario, can I expect to find a buyer who's willing to deal with this? How can I increase my chances of selling?

     I think Illinois has a hefty transfer tax doesn't it? What are the costs for eviction and how long is the process?

     He did a tax claim deed in another property. It took 15 minutes at the courthouse. 

    0Reply
  • Ryan D.
    Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes
    8y
    Quit-claim deeds are the least desirable form of deed, as they don't actually convey title. All a quit-claim says is "I renounce any claim I have in this property" which has NO baring on claims ANYONE ELSE may have on the property. If I was a potential buyer, I would be suspicious of this situation. For what reason does your friend want to use a quit-claim? Is the title clouded? Are their liens? If the tenant is not reliable, and your friend is unwilling to evict, then he is essentially (& knowingly) selling a lemon. I don't understand, why not just evict?
    5Reply
  • Fernanda B.
    OP
    Peoria, IL · Member since 2017 · 17 posts · 7 votes
    8y
    Originally posted by @Ryan D.:

    Quit-claim deeds are the least desirable form of deed, as they don't actually convey title. All a quit-claim says is "I renounce any claim I have in this property" which has NO baring on claims ANYONE ELSE may have on the property. If I was a potential buyer, I would be suspicious of this situation.
    For what reason does your friend want to use a quit-claim? Is the title clouded? Are their liens?

    If the tenant is not reliable, and your friend is unwilling to evict, then he is essentially (& knowingly) selling a lemon. I don't understand, why not just evict?

     Why quit claim deed - Easiest and less costly than a title transfer. He can go with the title transfer, though. He doesn't want to deal with an eviction. Yes, this is not a pretty, easy deal. That's why he's selling a house for $2000. This was never a secret. 

    0Reply
  • Ryan Boren
    Rental Property Investor · Park Forest, IL · Member since 2016 · 52 posts · 15 votes
    8y
    I’ll take the house from you.
    2Reply
  • Fernanda B.
    OP
    Peoria, IL · Member since 2017 · 17 posts · 7 votes
    8y
    Originally posted by @Ryan Boren:

    I’ll take the house from you.

     Ok. Message me for details?

    0Reply
  • James Ihssen
    Real Estate Broker · North Aurora, IL · Member since 2014 · 130 posts · 82 votes
    8y

    Hey There, Send me a message, I am interested.  Thanks.

    1Reply
  • Cody Evans
    Wholesaler · Fairfield, CA · Member since 2017 · 472 posts · 145 votes
    8y

    @Matt K.

    Hahaha. How did you even find this? Are you going to the meet up tonight?

    0Reply
  • Ryan D.
    Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes
    8y
    Originally posted by @Fernanda B.:

     Easiest & less costly, sure, but offering no protection or assurance for the buyer. Its like telling someone that for two hundred bucks you'll give them the keys to a car, but not the title! 

    Selling a house via quit-claim, and for only $2k, this really sounds like a red flag to me. If your friend is really desperate and willing to sell for $2k, why not sell to the tenant. Lots of ways he can come up with $2k to by a house (sell some possessions, cash advance on a credit card, borrow from others, etc)

    3Reply
  • Robert Herrera
    Investor · Denver, CO · Member since 2015 · 492 posts · 267 votes
    8y
    Fernanda B. I will take this as well. Message me if it's available
    1Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    8y

    What kind of debt and other liens exist against the house now?

    I bet it's under water.  For $2k you'll buy a house with more debt on it than it would be worth IF it was vacant and in good condition. Woo-hoo!

    1Reply
  • Dana WhickerPro Member
    Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes
    8y
    Those of you assuming a quitclaim deed is worthless in a binary sense really need to think about that.
    4Reply
  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    8y
    Originally posted by @Dana Whicker:
    Those of you assuming a quitclaim deed is worthless in a binary sense really need to think about that.

     Worthless or not is state dependent.  Aside from an internal transfer, you are going to have a hard time getting title insurance moving forward in Texas

    0Reply
  • Fernanda B.
    OP
    Peoria, IL · Member since 2017 · 17 posts · 7 votes
    8y
    Originally posted by @Steve Vaughan:

    What kind of debt and other liens exist against the house now?

    I bet it's under water.  For $2k you'll buy a house with more debt on it than it would be worth IF it was vacant and in good condition. Woo-hoo!

     There are back taxes, that the owner will pay before selling.

    0Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    8y

    @Fernanda B. Post the address.

    Gimer Law516 Reviews
    WebsiteView Page
    0Reply
  • Brent Coombs
    Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    8y
    Originally posted by @Fernanda B.:
    Originally posted by @Steve Vaughan:

    What kind of debt and other liens exist against the house now?

    I bet it's under water.  For $2k you'll buy a house with more debt on it than it would be worth IF it was vacant and in good condition. Woo-hoo!

     There are back taxes, that the owner will pay before selling.

    Fernanda, you can see how your statement looks, can't you? This is what the owner is suggesting:

    "Give me $2000 now, and I promise that the piece of paper I give you will say that any vested interest I have in the property will become yours (even though I'm offering no proof that I have any in the first place, or who else might), and by the way, any Taxes and other Liens that are outstanding, er, of course I'll attend to them with the money you give me. How much is actually owed? Oh, I don't have those figures with me right now, but give me the $2000, and I'll certainly look for the relevant documents".

    Tell the owner: Good luck with that!

    0Reply
  • Account Closed
    Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
    8y

    @Greg H.   It depends on the state but they might be able to get title insurance now even with a quit claim deed.  If they can that would help getting another one later.  Of course it is easier to get a $2000 policy than $100,000 in most states.

    They could also do a suit to quite the title later if there is enough value.

    Of course, the original poster was from Illinois so I would certainly want to check for liens the city has filed.

    0Reply
  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    8y
    Originally posted by @Account Closed:

    @Greg H.   It depends on the state but they might be able to get title insurance now even with a quit claim deed.  

    Agreed as I indicated it was state dependent

    My experience has been that it is easier to get title insurance in Texas with via a quit claim is the opposite.  It is easier to get title insurance on a 100K vs a 2K.  The higher the premium the more likely they are to play ball as the work is just the same.  Stewart Title is the one major insurer that will consider a quit claim on a case by case basis

    I have purchased a couple of USDA foreclosures in the past year in the sub 50K price range. USDA only wants to convey via Deed without Warranty.  I had to call in some favors both times to reach an agreement with the title company that while they would not insure my purchase that they would provide title insure when I resold the property

    0Reply
  • Fernanda B.
    OP
    Peoria, IL · Member since 2017 · 17 posts · 7 votes
    8y
    Originally posted by @Brent Coombs:
    Originally posted by @Fernanda B.:
    Originally posted by @Steve Vaughan:

    What kind of debt and other liens exist against the house now?

    I bet it's under water.  For $2k you'll buy a house with more debt on it than it would be worth IF it was vacant and in good condition. Woo-hoo!

     There are back taxes, that the owner will pay before selling.

    Fernanda, you can see how your statement looks, can't you? This is what the owner is suggesting:

    "Give me $2000 now, and I promise that the piece of paper I give you will say that any vested interest I have in the property will become yours (even though I'm offering no proof that I have any in the first place, or who else might), and by the way, any Taxes and other Liens that are outstanding, er, of course I'll attend to them with the money you give me. How much is actually owed? Oh, I don't have those figures with me right now, but give me the $2000, and I'll certainly look for the relevant documents".

    Tell the owner: Good luck with that!

     You're making a lot of assumptions here. Anyway, thanks for the useful tips.

    1Reply
  • Brent Coombs
    Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    8y

    @Fernanda B., so, you're admitting that the "owner" (I've added inverted commas this time; I should have last time too) is not making any promises to anyone?

    My main point is: Back in the day, Quit Claim Deeds were only ever intended to be swapped between family members / beneficiaries, not for every random outsider Tom, Dick and Harry that they could try to squeeze money out of! 

    ie. If the Title is good, rather than just thinking that "caveat emptor" covers the seller's back, it should be worth it to the Seller to ask for more than $2k, offered with a guaranteed Warranty Deed, cleared through a Title Company. That's what the Buyer will later attempt to do anyway, and would stand to make a killing, right? What's that? You can't say?

    Oh well, there's plenty of properties that aren't worth more than $2k as-is anyway, so if the Seller isn't going to help in any way with the homework, why make trouble for ourselves by risking this one? Onto the next Warranty Deeded one...

    0Reply
  • Fernanda B.
    OP
    Peoria, IL · Member since 2017 · 17 posts · 7 votes
    8y
    Originally posted by @Brent Coombs:

    @Fernanda B., so, you're admitting that the "owner" (I've added inverted commas this time; I should have last time too) is not making any promises to anyone?

    My main point is: Back in the day, Quit Claim Deeds were only ever intended to be swapped between family members / beneficiaries, not for every random outsider Tom, Dick and Harry that they could try to squeeze money out of! 

    ie. If the Title is good, rather than just thinking that "caveat emptor" covers the seller's back, it should be worth it to the Seller to ask for more than $2k, offered with a guaranteed Warranty Deed, cleared through a Title Company. That's what the Buyer will later attempt to do anyway, and would stand to make a killing, right? What's that? You can't say?

    Oh well, there's plenty of properties that aren't worth more than $2k as-is anyway, so if the Seller isn't going to help in any way with the homework, why make trouble for ourselves by risking this one? Onto the next Warranty Deeded one...

     Nobody is promising anything because there are legal documents to prove it. I thought this was obvious. 
    There are more factors that you are not aware of, as to why he's selling for this much - he wants to get rid of the place for more reasons than money alone. He has money now and is moving away (family related issues). 

    The seller IS FINE using a title company. In his words, if he gets $2000 out of his deal, he's satisfied. Did you read the post?

    You're assuming these documents aren't present. You're wrong and not helpful.  

    0Reply
  • Brent Coombs
    Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    8y

    @Fernanda B., yeah, please know my comments were not intended as personal accusations to anyone. More like: This could be a possible reason why it might prove to be hard to raise even $2k on this one! All the best to the owner.

    1Reply
  • Ryan D.
    Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes
    8y

    @Fernanda B. - what @Brent Coombs said is right. I don't think anyone here is making any type of acquisitions. What we are saying is that the advertised facts of an unreliable tenant, plus a quit claim deed, plus an incredibly low asking price, all sum up to be a questionable set of circumstances that raise a lot of red flags for investors. I suspect this is not be what you had intended, but it is the way the situation has been received by the investors on this thread.

    Given the feedback, you can take this as constructive criticism that "perhaps I can advertise this deal/situation in a way that address and alleviates the obvious concerns of potential buyers".

    0Reply
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