NC tax deed title issues

[Matt W.]

I am researching a property that is scheduled for tax foreclosure sale in Wilmington, North Carolina, New Hanover county.

The law firm that handles the foreclosure for the county says that the property will come with a “non-warranty commissioners deed” but the paralegal could not really explain what that meant.

The law firm also says that they WILL sell me title insurance at the time of purchase. They would not give me the name of the title agency that they use, however, citing privacy. I have read that tax sale properties will have a clouded title and will require extra legal action to get the title cleared in order to get title insurance and thus financing, so this is confusing to me.

The plan with this property would be to BRRRR it, so eventually getting financing is required.

Has anyone in NC dealt with a situation like this?

Thanks!

[Peter Walther]

I think you'll find most deeds from a governmental entity i.e. Sheriff's Deed, Tax Deed, Certificate of Title (out of a foreclosure) etc. will not have any warranties.  It's in the nature of the beast.  If the attorney is offering to issue a title policy post purchase ask for a pro forma commitment before bidding so you can see what exceptions to title will be taken so you'll have some idea of what defects in title will not be covered by the policy.