Tax Title Insurance vs. Quiet Title Action?

Question

Hello,

I have purchased several tax-foreclosed properties through auction. One of these properties (two side-by-side vacant lots) I am planning to sell on the MLS, and I had my title company look over the foreclosure proceedings from the County Treasurer and they cannot give me title insurance due to the foreclosure notices going to an address no longer used by the previous owner. So, I either have to do a quiet title suit or pay a higher insurance premium through Tax Title Services. Given the current flaw in the title, how likely is it that if I do a quiet title suit an interested party will step forward and try to reclaim the properties...and if that were to happen would I lose my investment (ie: the county does not guarantee clean title...so I'm assuming the sale is at the buyer's risk)? OR what about doing both....in other words, is it safer to get the Tax Title Insurance, and then initiate the quiet title suit knowing that someone may step forward?

Best,marc

Jeremy Tillotson · Answer

Marc M.Tax title services will pull the notices too, u would be required to tell them about the known flaw and they wont be insuring over that. Whats the value of property? Is it worth hanging on to for 5-10 years? Quiet title is always the best route, not the cheapest or fastest though. I have done alot of these so no legal advice but let me know if I can help.

Ron Walraven · Answer

Call Karen Ferguson @313-418-7111

Marc M. · Answer

Thanks for the quick replies @Jeremy Tillotson, @Wayne Brooks, and Rick H.! I should have mentioned that these properties are in Detroit since my profile shows that I am in NJ. Although, I would imagine there could be some similarity between states. I have had better luck purchasing tax-auction properties in nearby counties and had regular title companies insure the deeds. However in this case Wayne County is severely swamped with foreclosures and their practices may not be as thorough. I paid $16K for each lot, and it would be fine to hang onto them for 5 -10 years, but I was hoping to move them more quickly to keep growing. A lot down the road from me just sold for $40K in October, so I should be an a good position to cash out now. It is in one of the nicest historic neighborhoods in Detroit (Indian Village) so a vacant lot is surprisingly hard to come by. There is a company in Detroit called QuietTitle that seems competitive with Tax Title Services....if any Detroit investors out there have used them before, I'd be interested in hearing your experience....

Rick H. · Answer

Gursel Demir might weigh in and add some clarity. He's a NJ tax lien expert and knows his way around these situations.

Wayne Brooks · Answer

Agreed, tax title services vets the foreclosure process in order to do their thing, so if there's a flaw, they're out I would think. But, a question...in Florida the taxing authority is only required to mail the owner at the addres the Owner has provided on file, and if the owner moves it is Not the responsibility of the taxing authority to search any further. What's the statute on this in NJ? Also, if they did improperly notify the owner, only the owner would be able to challenge it, as the other parties did receive proper notice.

Tax Title Insurance vs. Quiet Title Action?

Tax Title Insurance vs. Quiet Title Action?

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