Title company not wanting in insure sherrif's deed

5 Replies

I bought a property in a tax sale in Montgomery County, TX.   It is not Homesteaded or Agriculture, and 6 months have elapsed since recording of the sherrif's deed.   I have a buyer interested, but their title company will not insure it, stating 2 years must elapse before they will insure it.

Has anyone come across this before and can you recommend a strategy that will enable me to sell it before 2 years expires?  Obtaining quiet title?   Finding a different title company?   Other ideas?   Thanks!

@Account Closed

  not sure about texas as I have never bought a foreclosure there.  However sometimes its as simple as checking with other title companies.. and maybe one of the TExas foreclosure regulars can chim.. maybe its necessary to quiet title .. although being a Trust deed state this is usually not the case

@Account Closed

  sorry I thought you bought a foreclosure not a tax sale.. yes many title co won't touch them for fear of a redemption claim.. just call around to different title companies if you get the same answer from all then you have your answer.  Then ask them if you quiet title with they insure   that will give you the answer

@Account Closed

This is why we teach our students/investors that they need to be prepared to hold the property for at least two years.  Even after the redemption period expires, title companies are reluctant to issue policies for Sheriff's Deeds in Texas until the 2 year Contestability period has expired.  Our investors understand that and so long as the property cash flows well, generally accept the property without an immediate title policy.  Note:  They of course are buying at a discount to retail for assuming that risk but we have yet to have one that did not get policy after the Contestability period expires.

Have you rehabbed it? Is it rented? I would not advise selling it to someone intending to occupy it, even owner financed as that open you to whole other set of liability risk. If you just want to take some cash out, you may consider JV with someone familiar with this type of property.

Thanks for the info, Roy.   The property is not rented or rehabbed.    Is is possible to obtain quiet title before the 2 year contestability period is over - would this then create an insureable title?