im a newbie investor in Atlanta Ga. I have my first possible deal on the table for a property that was purchased at a tax sale. The seller contacted me and told me that they bought the property last year and just completed the redemption period. They were currently in the process of obtaining a clear title when they received my inquiry to buy. 2 options were put out to either take it over as is...with quit claim deed and I complete the work to obtain clear title or at 2k increase in purchase price they do the work to deliver clear title. As I am unfamiliar with tax sales and this process. I opt for the later deal. However in reading a few blogs it seems as though obtaining a clear tilte is a lenghty process. Ive read that its a 4 year waiting period prior to obtaing title. Also read 6 months. What exactly are the steps needed to obtain clear tilte after tax sale and what is typical time frame. Also is the extra 2k added to purchase warranted for this process (are the title search are process fees this much? ) Would it be wort obtaining myself with instruction?
@Nataki Burke being as your new, opt for the 2k. Make sure to also get title insurance, just my .02 You could check with national tax title services for there fees as well. As far as timing it depends on the state and what problems may exist. If proper notice wasn't served they may only own a piece of paper, things people don't get about tax deeds. If you need advice or want me to look into anything just let me know.
I have never used them but I have heard of a Title company that may be able to help you. It's called Tax Title Services. Google it.
My understanding is that they can provide traditional title insurance right away.
Wishing you well. I would have put it under contract, have him cease improvements and let the owner complete the title transaction - - let him fuss with the issues.
Free and clear title on the tax sale can get nasty.
$2000 for a general warranty deed vs a Quit Claim Deed is a bargain.
Get under contract with the agreed upon price contingent on clear title.
Doing a Quiet Title can easily cost double this price.
If you were to buy it with a Quit Claim Deed then I would,'t pay more than 50% of the FMV because you are buying the property with a cloud on the Title. You are assuming some risk that the Tax Deed could be overturned and you loose the property if the county did not do everything 100% correctly.
I own many houses that have tax deeds and this does not scare me because I understand them, but I would at least do a title search and make sure the county notified all owners of record and any mortgage holders.
There should still be a steep discount on any property bought that has a Tax Deed.
Like I said $2000 would be money well spent for a clear title. This could take close to a year or longer if they were just now initiating the process. Maybe they started many months back and are close to finishing the process. I would ask them what the expected time frame is for them to receive clear title.
thank everyone for the advice its all very helpful. @John Underwood im going to contact the seller now and inquire about the expected time frame. Im not sure where they are in that process. The seller has stated they are willing tokeep me in the loop as they go through the process so I learn how its done. Just going to consult a re attorney ( whos investor friendly....any referals to any here in Atlanta?) to make sure I have contingencies regarding title and proper verbage in the contract before moving forward. Keep ya posted. Thx again
Clear title is obtained after one year in GA. After that, no banks or person can make a claim. But until that one year is up, a bank with a lean on the property can still repo the property. So if you buy the property before the year is up, there is a chance that you could lose it. But a lot of tax buyers , like easy money and wholesale the properties instead of doing what it takes to increase the value and market it themselves, so you might have a good deal on your hands. Congratulations on being informed before you make the jump! Not everyone is that smart ;)