Seller wants to quit claim me half a house for 5k

Hi Chris. I have an attorney referral that I will use. There are a couple of records I am waiting to get sent to me through the court before I proceed to seek council. Just wanted to ask in the mean time.

As far as being too good to be true I don’t know what to say. He’s tired of dealing with her and the house, doesn’t see a resolution anytime soon and can probably use the money

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Wayne Brooks

Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes

6y

Verify there are no personal juadgments/liens. Otherwise, seems worth the price of admission. You might want to buy insurance to cover Your interest/liability also.

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Tchaka Owen

Real Estate Agent · Merritt Island, FL · Member since 2017 · 986 posts · 1k+ votes

6y

@Steven N. - if everything checks out after a thorough title search, by all means jump on this! First route I'd take is to try to sell it to her at a discount. Let's say it's worth $190k (I don't trust Zillow all that much) that means there's $140k of equity. Grab $55k of that, so offer to her at $105k. You'll net $45k or so and she'll have a lot of equity in a home she fully owns. If you were to force a sale, she'd end up with $30k less (i'm not factoring in realtor fees), so your offer is a win-win. Good luck!

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Jim Campbell

Specialist · Buffalo NY (buffalo, ny) · Member since 2019 · 42 posts · 32 votes

6y

I have about a million questions ... here are some:

The original mortgage of 80k was in both their names. Current mortgage is 50k. Deed still in both their names....Zillow estimate is 197k...

Tons of bells going off right now... He is giving up 75K for 5K... too good to be true...

Is the bank going to allow the seller to walk away from the mortgage ?

Are you going to have to remortgage since one person is coming off and one is going on ?

Will she allow it.. or she may not be able to financially .

When she finds out that you purchased it will she continue to pay the mortgage like you are hoping she does... You need to be prepared to pay at least half if not all...

If she wants to stay in the house and can not afford to buy you out then what ??

I have several possible exit strategies:
1. Let her buy me out - If she is able to

2. Buy her out - If she wants to sell

3. Sit on it and let her pay down mortgage - She may stop paying and make you pay it after all she is owed seven years of mortgage payments and bills unless there was a written agreement. Remember your seller hasn't paid a penny since he left and he owns half.

4. Force a partition sale but I’m not really looking to force anyone out of their house - Will never happen if she hires a lawyer.

5. Sell to another investor - If your unable to deal with her who else is going to be able to.

and did you figure in : "A woman's scorn" that will kill any deal ... (from my wife).

Just throwing it out there...

1 Reply

Steven N.

OP

Member since 2018 · 29 posts · 2 votes

6y

Originally posted by @Jim Campbell:

My responses are underlined (Steve)

I have about a million questions ... here are some:

The original mortgage of 80k was in both their names. Current mortgage is 50k. Deed still in both their names....Zillow estimate is 197k...

Tons of bells going off right now... He is giving up 75K for 5K... too good to be true...

He has been stuck with this house for 15 years and doesn't know how to resolve it. I think I can do a better job of doing so

Is the bank going to allow the seller to walk away from the mortgage ?

No. Seller is selling his rights to the deed. Only way he can come off the mortgage is through a refinance.

Are you going to have to remortgage since one person is coming off and one is going on ?

He will still be on

Will she allow it.. or she may not be able to financially .

I am not sure what her financial situation is. I know she has been paying everything for the last 15 years without issue. I know she just put on a new roof

When she finds out that you purchased it will she continue to pay the mortgage like you are hoping she does... You need to be prepared to pay at least half if not all...

I am not responsible for the mortgage. I did not sign or agree to it. Im responsible for half the taxes

If she wants to stay in the house and can not afford to buy you out then what ??

That may very well be the situation. Then my 5k investment will sit until something happens like a death or sale. I could force a partition sale but I don't think Im interested in forcing someone out of their home.

I have several possible exit strategies:
1. Let her buy me out - If she is able to

2. Buy her out - If she wants to sell

3. Sit on it and let her pay down mortgage - She may stop paying and make you pay it after all she is owed seven years of mortgage payments and bills unless there was a written agreement. Remember your seller hasn't paid a penny since he left and he owns half.
If she stops paying the house will go into foreclosure and I would have right to half of any overages. I have zero connection with the mortgage

4. Force a partition sale but I’m not really looking to force anyone out of their house - Will never happen if she hires a lawyer.

I do not know I have to ask an attorney but if I have right to half the house then why not?

5. Sell to another investor - If your unable to deal with her who else is going to be able to.

and did you figure in : "A woman's scorn" that will kill any deal ... (from my wife).

Just throwing it out there...

I am not going to go in there with guns blazing. I am going to approach this with some level of tact and kindness and try to get on her good side. I think I could have her refinance and buy me out for 25k and I would be happy with that. SHe will get full ownership, the guy will be off the mortgage and everyone is happy. If she's really sweet and I feel bad maybe Ill even sell her my rights for 10k I don't know. If all goes to **** then its a 5k gamble and its not that big of a deal

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Jim Campbell

Specialist · Buffalo NY (buffalo, ny) · Member since 2019 · 42 posts · 32 votes

6y

I understand your response but if I were the seller, even if I am not friendly with my ex, ...I can't see not having title to a property when I am still responsible for the mortgage..

Just my opinion..

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Brian Ploszay

Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes

6y

This is a good deal. Legally, she has been paying the mortgage and all the bills, so I assume she'll claim to be entitled to this. That is an attorney question. Also, you are running this through a title company, which is important.

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Tom GimerBusiness Member

DMV · Member since 2017 · 3k+ posts · 3k+ votes

6y

Here’s another angle. The seller may have already shopped this case and concluded that he would spend much more on attorneys fees than he would be entitled to after a court weighs the equitable factors considered in dividing proceeds of a forced sale.

Then imagine how the court would treat a third party speculator for $5k.

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Marc Winter

Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes

6y

@Steven N., a few loose ends to tie up: how was the deed written; joint tenants, tenants in common, or some other permutation? Seems to me that quit-claiming to you will only work with 'tenants in common'.

You must look at BOTH parties on the deed as far as personal liens or judgments. They will attach to the property, and sometimes will only show with a full title abstract for title insurance.

All that being said, get into a binding contract with the seller and make that subject to clear title. A Quitclaim deed will offer NO warranties on the title.

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Tom GimerBusiness Member

DMV · Member since 2017 · 3k+ posts · 3k+ votes

6y

@Marc Winter When one of two joint tenants quitclaims his/her interest to a third party that severs the joint tenancy and creates a tenancy in common between the two owners.

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Account Closed

Specialist · OverTheRainbow · Member since 2020 · 607 posts · 909 votes

6y

Originally posted by @Steven N.:

Hi Biggerpockets

I have a seller that purchased a property in 2001 with his girl friend at the time. They broke up in 2005 and she has since stayed in the property.

The original mortgage of 80k was in both their names. Current mortgage is 50k. Deed still in both their names.

The ex gf still lives on the property. She pays all the mortgage, the taxes and insurance. She had the roof redone last year.

The guy just wants to be done with it and refuses to just give her his half.

He is willing to quit claim me his half for 5k. We’ve done a record search and the only things attached to the property are the mortgage and a small lien. Zillow estimate is 197k

I would purchase through a LLC or perhaps create a Florida land trust

I have several possible exit strategies:
1. Let her buy me out
2. Buy her out
3. Sit on it and let her pay down mortgage
4. Force a partition sale but I’m not really looking to force anyone out of their house
5. Sell to another investor

Title company is willing to create a policy on the transaction and run a full title search just to make sure Im paying 5k to someone that actually has rights to the property. Even though Ive already done a search of records I might go this route.

Another issue is due on sale clause. Ive heard purchasing through a florida land trust will not trigger this. Even if I just purchase through an LLC I don't think it being triggered is high.

I know not having control of an asset is not a situation you want to be in but in the ned of the day its only for 5k.

What do you guys think? Would you do this?

Sounds like a deal if everything checks out.

You pay your $5,000, make sure you get put on the home owner's insurance, record your interest, send her notice that you have bought his interest and give her your contact information should she have any reason to contact you, and then sit on it.

After this many years she is unlikely to sell or move unless she has to. Since she is paying down the debt, you benefit from that. The only downside I can see is if she encumbers the property with liens that eat up the equity or if she stops making payments. You have to decide at that point if you want to make the payments for her to preserve the equity.

It's a good long term play for little investment.

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Steven N.

OP

Member since 2018 · 29 posts · 2 votes

6y

@Account Closed how do I get added to her policy?

I was thinking, if this is a long term play why even notify her of the transaction and rock the boat. Maybe 10 years of her paying down the mortgage could pass before she even realized anything. Anyways thanks for input.

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Steven N.

OP

Member since 2018 · 29 posts · 2 votes

6y

@Marc Winter any idea what wording I should use on the agreement? Would it just be a standard purchase agreement with only his signature or would be more along the lines of a contracting stating "Seller is selling his rights to property through quit claim for sum of".

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Steven N.

OP

Member since 2018 · 29 posts · 2 votes

6y

Should a create a florida land trust and have the quit claim written out to that entity? Or an LLC?

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Peter Walther

Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes

6y

Originally posted by @Steven N.:

Should a create a florida land trust and have the quit claim written out to that entity? Or an LLC?

This sounds like an albatross the seller is tying to hang around your neck and get $5k for doing it.

If there's that much equity in the property I doubt the seller would be willing to walk away just because he can't figure what to do. Have you spoken with the ex? I think there's a real possibility she thinks her ex walked away from the property in 05. Possibly in 2005 he told her he didn't want anything to do with the house and if she made all the mtg payments and kept the place up she could have it. Maybe he gave her a quit claim deed and she forgot to record it or maybe it was accidentally recorded in the next county. Maybe they entered into an agreement for deed and he owes her a deed when she makes the last mtg payment and he's no longer liable for it.

Just because a title search doesn't find anything doesn't mean it doesn't exist. While recording laws generally protect a bona fide purchaser (BFP) without knowledge of an unrecorded matter, sometimes a court will find the BFP had a duty of inquiry which if not exercised eliminates the protection. You might want to talk with a good real estate attorney, preferably one who practices in the county where the property is and get some advice on what the downside could be.

I'm not an attorney and this isn't legal advice, it's just a suggestion. Good luck.

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Seller wants to quit claim me half a house for 5k

Seller wants to quit claim me half a house for 5k

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