Land deal under contract, now what?

Question

Just a quick introduction for myself. I'm a newbie wholesaler and just started dabbling in vacant land after listening to @Seth Williams. I have a small parcel under contract. Because the price is so low (under $100), I figured the quickest and easiest way to close would be using a quit claim deed. Seth has a good video on how to fill one out. My question is what happens after the seller fills out the deed? Ive never been through a closing before so I'm unsure on what the next step is to get the deed recorded with the county. I will not be using a title company either. Thanks for your help!

Karl James · Answer

@Eli Schmidt

After reading through your post again I wanted to add a bit more...

First, I applaud you for getting in their and getting started.  I sat around on the sidelines for about year studying / learning / procrastinating until I got focused on vacant land.   I am in the processes of closing my 3rd deal in 3 months and I attribute my willingness to actually get in and do something, as well as my success so far , largely to @Seth Williams and his BP podcast interview, responsiveness to posts and is REtipster site.

Second, have you considered asking the seller for a general warranty deed to see if they'll do it.  It might be worth asking.  Admittedly, with a < $100 purchase price, it doesn't give you much as it only protects you against $100 of risk; but, it might help you on the sell side if your potential buyer (or person to who whom you wholesale) sees a warranty deed rather than a quit claim deed in the chain.  Admittedly some sellers won't give anything but a quit claim deed.  If the property is of much higher value and potential buyers are anxious about the quit claim deed there may be a couple avenues you could take.   One is quiet title action.  If you want to learn more, search it here on BP.  The BP'ers have already said much more / much better than I could.  Another route is to find a title company that will issue an owner's title policy on a property with a quit claim title.  You might then be comfortable conveying to a buyer with a general warranty deed and  an owner's title policy for the sale price.  Some of the big boys in the title company space (e.g. Stewart Title) will not even consider title insurance for a property with a quit claim deed in the chain.  I ran across one company that indicated they could when I was contemplating buying a couple lots that had been conveyed to the owner by quit claim deed.  If you want to know more about the company & a contact, send me a message and I'll pass the contact info to you.

John Santero · Answer

don't know how its done in your state but here I just go to the trustee office at the county and get it recorded. Give them a call and find out. Should just be minimual filing fee-

Jeff McCaskey · Answer

@Eli Schmidt

Yep that should be it, go record it at the courthouse. Probably a 15$-30$ fee to file and you should be done.

You might consider opening an LLC for any REI activity you may do now or in the future so you don't have the same liability concerns as property in your name personally. You can do that usually with your local CPA for a couple hundred bucks - write a check and done. Or do it online through your state online for half that, but the site in KS wouldn't operate correctly at the time I created mine so I had the CPA handle it for me. (there will be a yearly renewal fee to keep your business name in "good standing" which is required when working with banks, its 45$ in KS). FYI

Karl James · Answer

With less than $100 at risk I'd suggest you use a notary to close and recorded it yourself.  If you take it to a title company you could easily be into them 3 to 5 times that much (as I assume you would be paying all the seller's closing costs).  Now reach out to neighbors and make them a good deal.  Fast cash, high return.  Way to go!

Eli Schmidt · Answer

Thanks so much for taking the time to respond to my question, everyone. I'm running a title search today to make sure the title is actually in the owners name and that there aren't any liens on the property. This is an extremely small parcel of land that the owner inherited from his dad, so he is letting my have it as long as I pay the $46 in back property taxes from the past 2 years. Based on the size, my only option for selling would be the 3 surrounding neighbors. I figured this was a perfect 1st deal just so I could practice going through contracts and filling out deeds with an out of state owner with almost no risk. As long as the title is clear, the worst thing that can happen is I have a piece of land for $23 a year. Not bad.

That being said, I think I will stick with just using a quit claim deed. With a property like this, would you guys say it's necessary to use a title company to close? Of just take the claim to the county and have them record it? I'm afraid that sounds too simple and I'm missing something.

Karl James · Answer

if the property is in an HOA be careful about past due HOA dues and assessments; e.g. Mowing assessments.

Wayne Brooks · Answer

Do you have any idea if the "seller" is actually the only owner, if there are property taxes owed, a mtg., other liens, etc.?

Eli Schmidt · Answer

Thanks, @John Santero . So really I just need to take the signed  and notorized quit claim deed and get it recorded? No more paperwork needed?

Land deal under contract, now what?

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