Tax Title Services

[Christina Brooks]

Hi! I am a long time lurker on BP and a newbie in the world of real estate. I currently have three properties that are rented out and am working on my fourth deal now. I found an investor looking to sale his prperty for a great price. Upon further investigation I learned the price is so great because he purchased the property in a tax sale and plans to offer me a quit claim deed (he currently possess the tax deed). When I questioned him about the deed type he said it is clean because it is a tax lien and the county clears titles upon sale. He said if it will make me confortable (which it will) I can purchase title insurance from Tax Title Services (taxtitleservices.com) . I was just wondering if anyone here has used this company and their service and is it what I need to be able to sell this property later?

Thanks for any info you can provide.

[Ned Carey]

Title insurance has become much harder to get on tax sale properties. Perhaps that is why the seller only wants to give you a quit claim deed. Or it could be that he knows of a defect in the tax foreclosure.

A quit claim deed can be a red flag when you go to sell the property. I would ask why he can't do a special warranty deed, or at least a bargain and sale deed. When I sell my tax sale properties the buyer gets a special warranty deed which is the standard in MD.

K. Marie Poe is right on when she says go through escrow. I would insist on a traditional closing where an attorney is the one preparing the deed and checking the title.

Having said that, I will buy a property without title insurance or with a quit claim deed if I intend to hold it Long term. If my title guy tells me the title is clean but his insurance underwriter will not insure it, that is OK in some situations.

We bought a property for $2,000, all in after renovations for $12,000. We have it rented section 8 for $1200 a month. It is a crap deed and it would be tough to sell. But we know no one is going to challenge the title and we get great cash flow.

Thanks for the tip about tax title services.