Sale, no clear title. - Posted by Lubasha

Posted by Lubasha on November 03, 2010 at 23:41:29:


I cannot tell you enough thank you for your advice. I sent email to tax title services and hope they will answer this coming Thursday. Meantime would it make sense to offer the buyer to pay for their stay in motel for 2 weeks (my title company is asking buyer to extend contract for 2 weeks but we did not get answer yet)?

The house is in move in condition but it is not updated in full (old roof, windows, AC, cabinets and flooring is old terrazzo) but it is priced accordingly. My neighbor over there is a fellow investor and he is going to put kind of similar house on market for 145k but he is doing major rehab.

Point is that my buyer if occupy the house certainly will have many reasons to complain no matter that they get it in desirable location good size house and lot for cheap. I don’t anticipate to find myself in this mess.

Beside, that was my request to speed up closing for reason I mentioned in previous discussion (LLC or Land Trust? Or both?). That’s why I feel that I have at least to compensate their motel expenses.

Should I ad the clause on this part if they will agree to extend contract?

Sale, no clear title. - Posted by Lubasha

Posted by Lubasha on November 03, 2010 at 01:45:38:

I have a property under contract and it is supposed to close by Nov 5th. This property I bought on Tax Deed Sales and did not insure the title. Now I found myself in trouble, title company cannot clear the title in time and they try to have former owner to give me a quit claim deed in order to be able to close. That owner located in different state; who knows if he is in good health or mind, and I have very poor understanding of what might happen.

Please, would anyone advise what should I expect next in case this scenario will not work? Can I sell the property without clearing the title in change of compromise with the buyer?

I wish to thank you everyone for help I have here when asking. Good will and collective mind is a real blessing.

Re: Sale, no clear title. - Posted by Dave T

Posted by Dave T on November 05, 2010 at 24:20:33:

You don’t tell us in which state this property is located. In some states, the former owner has a redemption period following a tax sale. In some states, once the redemption period expires, you have to go back to court for a quiet title action to truely get clear title.

If this applies to the state you are in, then that may explain why the title company has a broblem insuring title before a quiet title action is accomplished.

Talk with your attorney about selling the property to your buyers on a Contract for Deed. On a CFD, title stays in your name until the contract is satisfied and this will give you time to get the title problems resolved. Meanwhile, the buyer has all the benefits AND burdens of home ownership as though they had title in their own name, including taking care of any necessary repairs.

A less desirable option is to put your buyers in the property under a rental agreement until such time as you can complete the sale.

Tax Title Services - Posted by Kristine-CA

Posted by Kristine-CA on November 03, 2010 at 13:38:55:

Most title companies will have limits and exclusions for tax deed sales.
Often, the limits are because of possible overturns of the sale, etc.

If this is for a FL property, contact tax title services . com. They insure
properties purchased at tax deed sale in many states. The cost is
more, but it’s not as much as a court action to clear title.

By the way, if your title company is only requiring a quit claim from the
former owner, that’s pretty good. It means they want the deal to close
and aren’t that worried about liability. However, it would mean you
would have to find that owner and manage to get them to sign
something. I do not think it is worth the trouble. I think you are better
off paying for special title insurance.

I suggest contacting tax title services asap. Kristine

Re: Sale, no clear title. - Posted by Natalie-VA

Posted by Natalie-VA on November 03, 2010 at 11:48:06:

Is there a specific problem with the title that they are concerned about, or is it just that you purchased at tax sale that they don’t like?


You can always convey your interest - Posted by JT-IN

Posted by JT-IN on November 03, 2010 at 07:32:37:

Of course when doing so on a property with a clouded title it will affect the mkt value, meaning you can sell it but for less $$$.

It depends upon what the cloud/problem is…? Could you clear the title with a Quiet Title Action - QTA…? Often times when an issue of ownership is left unresolved from a prior conveyance this is the approach used. It takes some time and costs some money - 2-3K usually. It amounts to putting the former owner on notice, either by service or publication, that they may still claim an interest in the property; most don’t, and in time 4 to 6 months their prior interest is then expunged.

So if the title issue is something that can be cleared with a QTA then you could expect to take at least a 10K discount, maybe more… depending on how desirable the property is. In other words, why would a new buyer want to assume the headache…? If there is no specific and compelling reason, then maybe the discount required is larger than 10K. Or you decide that you would rather own the property for longer than you desired and clear up the required housekeeping on the title to reap the highest price possible. It is a matter of offsetting factors, time against dollars; either you save time and take fewer dollars, or you absorb more time for more sheckles…

Or, maybe the title co can offer the former owner who retains an interest to clear that up for something less than 2-3K and you get to save both time and $$$. Pretty much how it works.

Additionally, your market will be limited to other investors if you are selling a property with a clouded title. Maybe you were anyway, if it is a wholesale deal… but this problem eliminates ALL retail buyers if they are in need of a mtg to complete the purchase.

Re: Sale, no clear title. - Posted by Lubasha

Posted by Lubasha on November 05, 2010 at 01:29:41:


Thank you so much for this idea. I am in FL, and my title agent sent Fed-Ex to Indianapolis to former owner in hope he will sign quit claim deed for me. I understood that envelop is left on front porch and what? No comments.

Meantime I found that owner is 96, he is not listed in address where mail was sent.

Dave, first thing in the morning I will talk to title company (they have atty) and see what they say about Contract for Deed, wish by all my heart it to work.

To Kristine: Title Services in CA will charge 2,3k and it will take 45-60 days! I should look what it will take to clear title in local court.

Meantime it looks that I will let buyer to rent the house with clause that they have it in as is condition. I don’t know how to specify that payments might go toward purchase price, and what should I say about case if they decide to walk away rather then close?

Thank you all for your thoughts and consideration.

Re: Tax Title Services - Posted by Lubasha

Posted by Lubasha on November 03, 2010 at 16:02:23:

The buyer approved for conventional loan, she is handicapped and they live in motel waiting for closing by Nov 5th. With somewhat reason the title company found the problem only on Tuesday, they sent FED-EX to former owner in Indianapolis (from FL) and I am restless now to figure out a solution.

I am too green in investing and just learning the ropes. I am not sure what about title company is not happy but this is something related to chain of titles.

After covering outstanding taxes for 2009 and 2010 property would cost me 51k, I spent about 9k for repairs and it is under contract for 79k. Closing cost and REAs might take another 8-10k. So I don?t have much room to spend on title clearing problem but I feel very bad for buyer leaving in motel with the family.

My agent asking me would I agree to let them occupy the house before contract is closed and I don?t understand if that would be a right decision?

Kristine, thank you so much for idea about tax title services, I call them after 4 pm but no one answering and I will send them request for title insurance by email. Don?t you know how much they might charge to insure the title and how long it might take?

Please any suggestions, should I let the buyers to occupy the house before closing and if yes on which condition?

Re: Sale, no clear title. - Posted by Kristine-CA

Posted by Kristine-CA on November 05, 2010 at 12:10:31:

Lubasha: does TTS know the status of your current contract, that you are
in escrow, that you already have a title report and which title company it’s
from? They should be able to perform way faster than 45-60 days…and
you can tell them I said so. :slight_smile: Kristine

Tax Title Services - Posted by Bill H

Posted by Bill H on November 05, 2010 at 18:10:06:

They charge $750.00 UP FRONT to initiate the title search, etc.

Then IF they say they will insure it can be another $750.00 or more to complete the process.

Normally takes 60-90 days.

Good Luck,
Bill H

Re: Tax Title Services - Posted by Ken

Posted by Ken on November 03, 2010 at 18:44:09:

Do not let them occupy before sale.Every time I ever did it I was sorry.They will nit pick everything and you will not be able to fix it as fast as they fing something else even if you just renovated the place.

Re: Tax Title Services - Posted by Kristine-CA

Posted by Kristine-CA on November 03, 2010 at 17:27:28:

I suggest you have your escrow office prepare something in writing to
extend the closing date if you are not able to close by Nov. 5. Once
you are past November 5th, you are “out of contract” and the buyer and
lender are no longer required to perform per the original terms of the

As for the family living in a motel…remember that is their choice.

Do you have reason to believe that the previous owner won’t be
returning the quit claim on time? Did the previous owners agree to
sign a quit claim? Is escrow sending documents to them after having
spoken with them? If not, don’t count on that as a solution. Tax title
services should be able to underwrite a policy in a few days. The cost
for something in that price range is probably a $1K more (or less) than
the policy you were going to close with.

If it were me I would NOT let the buyers occupy the house before
close. Their lender may or may not perform, the quit claim may or
may not arrive, a title policy may or may not be available. To many
maybes for me. Kristine

Re: Sale, no clear title. - Posted by Lubasha

Posted by Lubasha on November 05, 2010 at 12:55:04:


I think they know that property is under contract with my title company, but they say they work only with First American Title and might transfer the certificate to my title company after it’s done. I will try to call them again to mention you referred me but their fees look weird and I will try to check what else is available to work out this situation.

Thank you for continuous support.