Property can't qualify for title insurance

[Jason Howell]

There is a property on the local MLS that says it won't qualify for title insurance. The sellers are strictly looking for cash buyers. I had my agent check into this property and I did some additional investigation. We discovered that the LLC that owns the property purchased it on the courthouse steps roughly 7 months ago and is still in the 2-year redemption period. The LLC that owns the property was created roughly 9 months ago and, as far as I can determine, owns no other properties in the local area. I searched the county clerks records and it seems that the previous owners got behind on their taxes a few years ago and wound up getting a tax loan. It looks like that company foreclosed on them in 2020. I have not walked the property yet, but from the MLS photos and description, it seems to be in decent shape and vacant.

So, my question is should I consider buying this property, and if so, how should I conduct my due diligence? I don't know why this LLC is trying to sell within the redemption period, instead of simply leasing it for the 2 years until they can get a clean title and title insurance. Although, if they are motivated, it may be a good buy and hold opportunity. I've never purchased a property from the courthouse steps so I'm not sure if there are additional pitfalls that I need to investigate.

Thank you for any insight you can provide.

[Arnie Abramson]

Eric made a good point-was it sold at a tax sale or a bank foreclosure?  If a tax sale, the 2 year redemption period only applies if it has a homestead exemption, agriculture exemption or is a severed mineral lease. However, there is a lot of misunderstanding.  It is not the redemption that causes the inability to get title insurance.  It is the 2 year period in which the former persons who had an interest om the property have the right to contest the sale if they were not properly notified and given an opportunity to pay the back taxes.  Feel free to contact me for more info.