Quit Deed, good idea or not??

Question

Here is the situation.

Neighbor dies and there is an existing mortgage on his property.  He has no assets so the bank begins foreclosure.  A year or so before the owner dies, his daughter moved in to take care of him.  The daughter has moved in with another neighbor.  No one else is interested in the property other than myself.  The real estate agent representing the bank said we could sign a Quit Claim Deed with the daughter.  We have already made an offer to the bank to purchase the property.  The Quit Claim Deed would give us control to protect the integrity of the property, otherwise, the pipes are going to freeze and bust, two dogs living in the house unattended at night, power turned off, copper wiring stripped and so on.

So, here are my questions:

Who is liable for the Property taxes?

Can I rent the property with only a Quit Claim Deed?

Who is liable for the property in the event it burns down, broken into etc?

Would we have any financial responsibility for the existing mortgage?

Annette Hibbler · Answer

If pets are left unattended in a freezing house with no electric or heat, please call the ASPCA for their own safety.  It's just been an exceedingly cold winter this year and dogs are not immune to the cold.

Account Closed · Answer

The mortgage remains against the property unless the lender forecloses, somebody pays it off, or they forgive/release the debt. I suggest you tread very, very carefully before you put one dollar into a property if you don't understand the entire title picture.

Is the daughter the actual deeded owner?  Or did she just inherit it after her father died?  Is there a will?  Was it held in a trust? A quit claim from an heir is worthless.  If her father's estate still owns it, then the property has to be purchased from the estate.  Depending on value, estate debt, and LA inheritance law, the estate may need to go through probate and be distributed to the heirs.  The heirs can then sell the property after they own it.

The bank cannot sell what it does not own. They do not own the property, so I'm not sure why an agent is working for them. Is lender willing to short sale the property (settle for less than what is owed)?

What are the numbers?  How much is the property worth and what is the outstanding loan?

Account Closed · Answer

Hey Rick. As is so often the case here, we don't have enough info.  Presumably because the OP doesn't know how to present the issue(s). The OP's question is about the power of a quit claim.  But a quit claim from whom? Is the daughter a deeded owner in chain of title?  Or just an heir?  Assuming there is a valid owner or entity that can deed the property, is the lender shorting the senior lien?  Or allowing a sub2 or old school loan assumption?  Or is the property held in a trust and probate is moot.

So short on facts.  So so murky.

Jerry W. · Answer

@Sherrie P. based upon the way you framed your facts it looks like the daughter was not the legal owner of record.  If not you would need to do the estate of the person who died to make sure it goes to that daughter.   You could also file a quiet title action to clear up the ownership but if there are more than 1 child you could end up in a lawsuit and not get ownership at all.

Account Closed · Answer

Given the lack of details on other issues, I was going to let the dog thing go. Thanks for bringing that back into the conversation.

Dennis Lanni · Answer

What about those 2 dogs are they old enough to be left alone at night?

Rick H. · Answer

Sherrie P. - IMHO, Kristine Poe said it all. The only person or entity that can transfer title is the owner. If the deceased owner is still on title (you can check county records for last deed associated either that owner/property), someone with the power to transfer on behalf of the estate must do so using the appropriate LA documentation.  A title company would be very helpful here.

And what are you trying to do here, buy this property at a discount?  In order to know how much you can justify to pay, you need to know its value. What's it worth in its current condition? How much is owed against the property, in total? How much of that is back payments and foreclosure costs?

To answer your questions, in my state, CA, it is possible to buy a property during probate, subject to the existing mortgage without paying it off. See other BP forums on this technique. Even if you did NOT assume the mortgage, you'd still need to pay the back payments (arrearages) as well as bring the property taxes current.

However, I think the thing you ought to do is first determine if this "deal" would make sense for you, then think thru the mechanics of how you are going to get title.  It's not complicated, just treat like you heard about the situation from a friend who knows you to be a real estate investor.  So, what are the numbers?

Quit Deed, good idea or not??

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