Can i close on a quitclaim if there is no title policy ?

Question

Good evening... I have a title issue with a deal i have and could use some help on this.... The seller on this property does not appear to have an insurable or marketable title to the property. Seller obtain the property by quit claim deed from original owner but title cannot find any deed or other conveyance into original seller. Im trying to find if seller received a title policy when he purchased? If he did, then all we have to do is provide that info, but what if he didnt? Title is saying If not, they want be able to proceed with this transaction. My question is is there anything the original seller can provide to title that would fix this? The original seller was a family member who quit claimed to current seller

Arsen Atanasovski · Answer

No you shouldn’t bolt! Need to do you due diligence. When you buy QCD you need to do you homework. In Detroit QCD is every other deal because Wayne county auctions off properties and they only offer you a QCD also a FOIA packet with the property that states all the time the city tried to contact the owner to pay their taxes but they didn’t. So I’m any case the owner comes back to claim the property you have an entire packet to bring to the court and courts honer the packet not Joe from the street that said I never knew I own taxes..... yea right after 5-10 years later. So there are advantages and disadvantages, prices are going to be different with QCD but you can always order a title company for a few hundred dollars to research the title and let you know how large the cloud is. Now if there is 10 different owners that have claims then I would walk away. If it’s a family member that QC to another family member then you can get that cleared up with the first owner (family member) all cases are different and all cases should be reviewed if you plan to proceed. I buy QCD properties and haven’t had a problem but the title leads up to the county and the pervious owner not paying property taxes. I have another one the owner died and had no will attorney provided all that to be prior to closing.

Tim Bender · Answer

Yes you can, I buy properties every day without a title policy. Every title is clearable. The big question should be what are you paying for it? I factor in a clouded title into my purchase price. You can also buy just part of a property, even a 1% share, and wrestle the other interests away. I often buy these properties and then get them cash flowing while I’m clearing up title issues. Feel free to give me a call during the day and I can go over the steps your looking at. Have the title abstract available for questions I’ll have.￼ I have a curative title company and teach buying clouded titles, they’re extremely profitable.￼ Look at my profile for contact information since it can’t be posted here.

Patricia Steiner · Answer

Here's what you should do:  BOLT!

The "seller" cannot be the "seller" if the "seller" does not hold title to the property.  And, know this:

"Quitclaim deeds show up commonly in fraudulent real estate transactions. This type of deed fraud can impact elderly people, buyers purchasing real estate from strangers without warranty, renters who are paying someone who is not a legitimate owner, and anyone involved who might buy, sell, or own property." (Source:  Deeds.com)Nothing good can come of this for you...

Arsen Atanasovski · Answer

There is no title policy because the original title is not present. You will need to find the original owner to give their title to title company to process warranty deed, if not you may hire a lawyer and proceed with a quiet title which in return will provide you with a clean title, but with quiet titles it takes months to process and you are basically opening a can of worms, because the process allows all pervious owners to be notified weather or not they have interest in the title, deed, property, etc.... if anyone of the pervious owners do, then there might be extra money you will need to provide them to clear title.

Nate Sanow · Answer

@Lee Bailey

Typically your title company is an agent for or direct provider of title insurance they should be able to provide “gap coverage” for this situation. Varies somewhat from state to state and company to company & the actual properties issues of course.

Lee Bailey · Answer

FYI, this is in the state of Alabama

Lee Bailey · Answer

Turns out, the person i have the contract with picked it up via quitclaim. The person they picked it up from picked it up as a tax deed and never got a clear title. So attorney says a they would need to get the tax deed from the probate court if they doesn’t have that already. They would then need to record that in the probate office. Then they would need to get a quiet title action underway if they have owned the property long enough.  That usually costs about $3,500 and takes about 6 months to complete. The originally seller has to do the recording  but either the original seller or the person who it was quitclaim to can execute the quiet title process...

Drew Sygit · Answer

Make sure you understand, that if you buy, you cannot get a mortgage or any other type of loan against the property until you clean the title.

We're trying to buy one right now with a QCD, but we've done our homework and know what we have to do after closing.

Steve Morris · Answer

"My question is is there anything the original seller can provide to title that would fix this?"

OK, I'm just being stupid here, but have you asked title what they would need?

Paul S. · Answer

If this is a hood property hood shit happens.  If you are getting the property CHEAP keep moving forward.  Remember, for someone to reclaim a property lost by deed fraud they would have to litigate - no money in the hood for that!

Can i close on a quitclaim if there is no title policy ?

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