Buying homes from motivated sellers...what happens to their "problems" when the home becomes yours?

[Miles Stanley]

so say you approach a potential motivated seller to buy their house and relieve them of their financial issue (cant make payment, etc).  You make an offer, close on it for the agreed amount and boom, its yours!

When the property becomes yours, what happens to that mortgage that was attached to the property?  Also, what about other things like liens, etc?

Probably a dumb question, but I'm learnin' here! : )

Thanks,

[Blair Poelman]

@Miles Stanley

Lots of good, or bad things can happen when you relieve somebody of their problems.

For example, if you take title subject to, you're inheriting all those problems. Or if you take title on a quit-claim, you're getting whatever interest that seller had, along with any clouds on that title.

Most common way is to have a traditional closing that clears title and pays off any liens, issues a title policy, and gives you true marketable title - that is only encumbered by whatever you have encumbered it with (mortgage, trust deed, UCC 1, Promissory note, etc.)

If you don't / can't go through traditional title (say for example, you buy at a tax foreclosure sale), I'd say it's best practice to go through the quiet title process.  Somewhat long and a little bit expensive, but until you have a clear title report, you don't have clear title.

Note above that I said "most common", not best.  The "best way" is going to vary depending on the deal.  As a general rule clear title is always desirable, but depending on what your strategy is, you may not care about title at all.