Tax Deed land purchase, when is quiet title necessary?

Question

Hello all,

I'm looking to buy some land at a tax deed auction in Northern California.

1. Would I be able to resell it with seller financing right away (without having to quiet title)?

2. If I sold it for cash would I need to quiet title?

3. If I held onto the property for a year could I then sell it without having to quiet title?

Thanks for the advice!

Michelle

Michelle Robbins · Answer

Hi @Carol Venolia,

Thanks so much for the response and helping to clarify this issue.  So good to know the year waiting period no longer gets you clear title.  Thanks again for your help.

Happy Investing,

Michelle

Carol Venolia · Answer

Hey @Michelle Robbins, welcome to the wild world of tax deed auctions! I've participated in 9 tax-deed auctions in Northern CA, so I know some stuff but not everything. I'm actually not familiar with quiet title; I'm under the impression that it involves going to court and spending a fair amount of money? So I try to avoid that.  :-)

What I have found is that the old rule of thumb--which said that if you bought a property at a tax deed auction and held it for a year, the title was automatically clear--is no longer true. I bought a couple of lots in a tax-deed auction, and when I went to sell them a year and a half later, I found that all the title companies I called have new policies that require a person to hold the property for 3-5 years or more before the title was regarded as clear. The alternatives are to pay $2K+ to Tax Title Services or to do a quiet title. I paid Tax Title Services (it's just a cost of doing business now), and it went pretty smoothly.

But the policies seem to be in flux. The title company I used to sell the first lot told me that now it's case by case, so I may or may not need to go through Tax Title Services for my next sale. Hard to get clarity on this issue these days!

I understand that it's also possible to sell directly to a buyer who doesn't mind that the property might have unclear title; you just have to disclose all.

Please keep us informed about how it goes for you!

Carol