Tax Deed Property Help in Atlanta

23 Replies

I am trying to buy a property from a seller who acquired the house through a Tax Deed sale in Georgia. He has already gone through the necessary  foreclosure steps according to his attorney.

The seller tells me i will only be able to rent the house or live in it for four years, as i will not be able to get the title insured since it was bought through a tax sale. After the four years, then i could sell to a retail buyer, who could get Title insurance. So, basically, i would be given a clear tax deed at this time. Does anyone have anyway around this, my plan was to fix up the house and resell, but i don't want to have to hold onto it for 4 years in order to do resell. I don't even think an investor-landlord would touch this if they cannot get title insurance, so that is my main concern. Thank you.

Talk to Your own RE attorney who is familiar with the tax deed process.  Do Not believe what someone selling any kind of tax deed/lien property tells you.

I had already made an appointment with a attorney i met through ga reia. I was more or less wondering if the 4 year waiting period thing was typical when buying any deed properties, not just for this particular deal, but for others i may find. I'll post again once i speak to attorney.

The law is the law, the process is the same for any local tax deed/lien property.  All will be treated the same.

@Morris Lucas  I am not an attorney, and you need to verify with an attorney (not his attorney!) if the following is accurate.  However, I have invested in two tax deed properties in Georgia this year and have learned a lot.  IMHO, his attorney is not correct.  What I bet he has actually completed is the 45-day barment period, which is the first (and easiest hurdle) in the process required to obtain a clear title, and therefore, title insurance.  He is correct in the fact that in Georgia, after completing the 45-day barment period requirements, the new owner can simply wait 4 years to obtain clear, marketable title and the previous owner cannot reclaim.  However, during that 4-year period, you might be able to use it, but it would be very difficult, if not impossible, to sell.  What YOUR attorney will tell you, and his attorney should've told you, is that the Seller has decided to sell the Tax Deed property after completing the 45-day barment period because that is the easiest and cheapest part of the process.  What it doesn't sound like they've told you is that the next step, which is a judicial quiet title action, is a much longer and costly process.  So, it may be a good idea if you factor an additional $5,000 to $6,000 in fees to complete the judicial quiet title action and recognize you really can't (and shouldn't) do anything with the property until you can procure marketable (i.e. marketable) title and that will take at least 6 months.  AND, here's the kick in the teeth with your particular situation:  His attorney either knowingly or unknowingly misrepresented the situation when he stated that he'd already gone through all the necessary foreclosure steps, and led you to believe you had to wait four years for insurable title.  He/she either intentionally misrepresented or is inept in this area of the law.  So now the quandary I would have if in your shoes and I was being offered this deal even at sufficient discount to warrant the additional  $5,000-$6,000+ expense, I would then ask myself, worst case scenario, can I pay the additional expense and still hold it for four years and come out on top?  Back to the kick-in the teeth: the judge does not have to grant the petition to quiet the title.  If the Seller's attorney is inept and screwed up any of the very specific, tedious, administrative details required during the 45-day barment period, it's a better than good chance the judge hearing the case won't grant the motion that would pave the path to an insurable title.  In that case, it looks like you're living there for four years.

Good luck! 

"The law is the law, the process is the same for any local tax deed/lien property. All will be treated the same."

I believe it's different in Georgia. From researching and talking to assessor site, the rules vary county to county.

David;

Thanks for the in depth summary of the process you went through. The seller did mention the barment period. Neither mentioned the quiet title expense(wonder why)

This seems like too big of a risk, especially if there is no guarantee i can be granted clear title, even after the additional expenditure.

I will still speak with the attorney about this tomorrow. I appreciate your input.

These type of properties sound like it would be better to acquire if you can simply get the ORIGINAL OWNER to sign off the deed to you, thus avoiding all the redemption requirements and roadblocks.

Check out taxtitleservices.com. They specialize in performing quiet title actions on deeds won through tax lien or deed sales. Georgia is on the list of states they operate in. Their pricing seems fairly reasonable too. They come highly recommended by the US Tax Lien Association (training program for people interested in tax liens and deeds).

@Paul Spangler  @Morris Lucas  I want to agree with Paul regarding taxtitleservices.com in one respect - they are generally effective, HOWEVER, Paul's statement that "They specialize in performing quiet title actions...." is incorrect.  They do NOT specialize in performing quiet title actions, they've discovered and capitalized on a way around the quiet title action process which allows them to advertise - and deliver - on a quicker and cheaper process. They claim to perform a more rigorous due diligence to notify the prior owners and go over and above the minimum statutory barment requirements.  Then, once they complete they process successfully they'll issue a "Certification Certificate" that American Title Company will use to insure the title.  If I was in a state that this process had some history and/or these "Certification Certificates" were universally accepted by more than just that one title company, I'd be more inclined to go this route.  I did actually evaluate them, and would've even used them if I was buying as investment income property to hold rather than to flip.  

Paul, good tip, i'll look into them.

David, again, thank you, for the cautionary wisdom. I was thinking if I run the numbers and it works as a rental, it may be a candidate for a buy and hold. The seller is basically lowering the price daily, so as long as repair numbers aren't insane, it could be a good rental option. You guys have definitely given me some food for thought...

David, btw, if I were to buy it as an investor from the seller for a rental, that would put me in the same situation as him, correct? (i realize i would still have to spend the $ on the quiet title action)

@Morris Lucas  

 I don't know what you mean by "same position as him..." and if you want to buy it as an investor from the seller and use as a rental for income, you would NOT have to spend the money for a quiet title action if you closed on it and recorded the Deed in your name and held it for the statutory 4 year period.  You could then get title insurance without a quiet title action - the 4 year period served to "quiet the title".  As long as you buy with cash and hold for four years, you are in the clear.  However, during that four year period you will not be able to use as collateral, so you can't finance the purchase or the rehab, and you'll not be able to sell it for four years.  

Good luck and let us know what you decide.

Warning!  Tried to research taxtitleservices.com and seems shady, when trying to find out info links to another site and that site had page errors and all sorts of red flags... 

@Darron Stewart    I performed the necessary due diligence on the company when analyzing the best route to take with the tax deeds I owned, and I can tell you they are legit.  They come highly recommended in those states where they've been operating for a while.  However, the concept is new in many states they now operate, including Georgia, and it will take time before the "Certification Certificate" becomes more widely accepted as an alternative to judicial quiet title action.  

@Morris Lucas

@David Begley has give you a very clear picture of actions needed for the quiet title.

If your intention is just to buy & hold(rental) or live in yourself; you do not need to Quiet title.

You do need to file a Final Barment  Affidavit, so this will show on record that you are the owner. It's around $250.00. 

@Tom Yung  If I painted a clear picture, it was because I had an excellent teacher/mentor that was very patient in explaining the process to me.  Thanks for being that teacher/mentor Tom!  

@David Begley

Thank you for your humble & kinds word.

You are brushing my face red now.

If this is the same Tax Title Service based in Costa Mesa that I dealt with once, they are not shady. They are...well, not customer driven. 

I had a couple of vacant lots that I bought at a HUD sale many years ago. I intentionally let them go to tax sale in order to liquidate, intending to claim the surplus overbid overage (which amounted to $125,000). Beautiful but unstable CA land lots were sold online to a 3rd party bidder.

3rd party bidder got deed from county but not marketable title. Buyer paid tax title service to insure. All I got were bunches of quitclaim deeds a release forms and FedEx self mailers. I was happy to sign since I wanted to expedite my claim for surplus funds. Title tax people run by a former title company ATO. They underwrite thru another title company. I was fascinated at their total lack of bedside manners or gratitude for my cooperation (as a former owner). 

Were it not for my own motives I would have ignored them as they offered no incentive for me to sign in any way. They could have at least offered to send a mobile notary at the clients expense but did not. I popped for the $10 X 2 QC deeds. 

My original investment in the lots: $1,350. I think I did ok.

@Rick H.

You did more than Ok, Can you explain on unstable land lots.

Are they buildable?

 

Hi Tom - Actually, town homes had previously been built on these lots in the 70s and then scraped in the early 80s after big rainstorms had caused their backyards to slide down the hill. 

The structures had initially remained what appeared to be unscathed but had were demo'd after litigation was completed by all parties. By all accounts the remaining lots looked beautiful as they were on top a hill with great vistas. 

Also, there were actually four legal parcels but were on two pads with different elevations. Without measuring or surveying, a casual drive-by resulted in would-be bidders to conclude that they were buying two finished lots in a developed subdivision with an HOA.

Really, this is all about someone overbidding at tax sale property without performing sufficient due diligence. I expected someone to pay about 10% of the total amount bid on the two parcels so was astonished at the actual bid results. My big concern was that the high bidder would find a way to back out!  

Originally posted by @Morris Lucas :

I had already made an appointment with a attorney i met through ga reia. I was more or less wondering if the 4 year waiting period thing was typical when buying any deed properties, not just for this particular deal, but for others i may find. I'll post again once i speak to attorney.

 Morris. How did this work out for you?

Im in a similar situation. I have a deal on the table to purchase  property from a seller who obtained it through a tax sale. The sellrr stated that they just completed the redemption period and are currently in the process to obtain tiltle.  I am unfamiliar with tax sales and this process. My strategy is to fix and flip/ sell with lease purchase option. The area is a more of rental community, so the rent to own lease purchse option would be my primary exit strategy as I didnt particularly want to do the landlord thing.  I do however Need a marketable title and expected to close quickly. My question is now, ( after reading the past post regarding obtaining clear tiltle and 4 year waiting period....) how does exactly the process work in obtaing a clear tilte and what is the typical time frame?  Want to make sure  im able to flip asap. The seller has promised to deliver a clear title.

@Nataki Burke

There are two process to obtain clear title for tax sale properties in GA,

First to obtain barment from previous owner. Time frame - minimum 45 days. You can use it as rental during this period or doing rehab work.

Second to quiet title - Time frame - 3 to 4 months after completion of barment.

Hope this helps.

Yes. So just to clarify even after the. 45 day barment period. There is an additional fee months it takes to quiet the title at which time the seller has the ability with clear title and title insurance to sell it to me. I did not expect the process to be this lengthy.  The deal is to sell to me only after producing a clear title which sounds like 5_6 months from now as the 45 days starts next week. This is definitely something to consider.....

@Tom Yung

Hi Tom,

Thanks for Sharing that Information. I am New in that Space Can you or anyone on this Forum Please Clarify my Below Questions.

"First to obtain barment from previous owner. Time frame - minimum 45 days. You can use it as rental during this period or doing rehab work. - Can you Explain What is Mean by Obtaining Barment from Previous Owner?

Second to quiet title - Time frame - 3 to 4 months after completion of barment. - How Much it Cost to Get Quite Title on a Property? Can you Suggest Few Good Attorneys for that.

You do need to file a Final Barment Affidavit, so this will show on record that you are the owner. It's around $250.00. - Can You Please Explain this? Is that Happened Once you Obtain Barment from Owner?

And Lastly

Can you please Explain in Detail the Full Process in Georgia for Tax Lien/Deed After One Year You Have to Go Through Once Redemption Period is Over?

Thanks

Umar

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