Quit Claim Deed... How does that work?

[Teowonna Clifton]

So... I've found a deal that is very interesting to me. If it goes through, this would be my first deal. But I need your help with a few questions. So... this seller needs to sell his property quickly. He is a couple of months behind on his duplex mortgage (about 3k) and wants to sell it via quit claim before it forecloses. The buyer will pay the outstanding amount and a little cash to him. The property does cash flow. So, here is my question... how does the quit claim deed work with the existing mortgages (there is a first and second, totaling $118k)? Would his name remain on the mortgages? Will the note be accelerated and require payment in full? What are the questions I need to ask? What are the pitfalls I need to avoid? 

I was able to find out that he is motivated to sell because he got a DUI and it really put him in a bad situation. He's not able to work right now. He has sold several of his other properties already and has 2 more, including this one. I did a drive-by and property looks great from the outside. We have a visit scheduled for Saturday. I would love your insight. Please and thank you.

[Robert Gilstrap]

@Teowonna Clifton  Essentially you are describing doing a subject to deal and yes you should jump on it. When you have someone who is motivated by the "D's" in life you have the makings for a wonderful deal for you (Drugs, death, disease, DUI, divorce, dumb decisions)

You definitely don't want him to just give you a quit claim deed for various reasons but my guess is he'll sign any type deed to get the money  and be out. There is a lot to understand on doing a subject to and I'm a lazy typist so give me a call and I can walk you through exactly what you need and what documents you need.  

[Christopher Phillips]

@Teowonna Clifton

Why don't you just buy the house like normal?

A quit claim deed is used to change owners on a property, like adding or removing relatives.

If you quit claim it and leave the current mortgages on the property under his name, the lenders will likely call the loans due.

[Teowonna Clifton]

I'm interested in this deal because I don't have to go through the bank. I'm looking for owner-financing and similar deals. 

[Jason D.]

With a quit claim deed there is no title search or title insurance so if there are any issues with the title, they will now be your issues. I don't think it is a smart 1st deal, because it could have very negative consequences. You should look into a subject to deal. I, personally don't know much about them but I feel like it would be a safer way to do what you are trying to do.

[Robert Gilstrap]

@Teowonna Clifton  Essentially you are describing doing a subject to deal and yes you should jump on it. When you have someone who is motivated by the "D's" in life you have the makings for a wonderful deal for you (Drugs, death, disease, DUI, divorce, dumb decisions)

You definitely don't want him to just give you a quit claim deed for various reasons but my guess is he'll sign any type deed to get the money  and be out. There is a lot to understand on doing a subject to and I'm a lazy typist so give me a call and I can walk you through exactly what you need and what documents you need.  

[Teowonna Clifton]

Thanks, @Robert Gilstrap. I will definitely reach out to you for more information.