Posted by Tim (Atlanta) on June 29, 2001 at 11:53:25:
I don’t think the consideration amount listed in the WD has anything to do with the actual price of the home or the amount that you paid to get it. Usually the consideration is $10. It is just there to make this a legally binding document.
Don’t know where you are located, I use Ganek, Wright and Dobkin here in Atlanta. They are located in midtown, so they are convenient to my place of work. Plus they understand what it is that I am doing. They are also very thorough. It is good to have a detailed set of eyes looking over the closing items. I have had them clean up some pretty serious messes of mine, and they are always professional.
Posted by Summi (GA) on June 29, 2001 at 10:13:40:
I know this may be a stupid question. But I believe in getting a full understanding.
This is my first deal. I just cured a preforeclosure worth $120k Owner’s info is still on the $90k loan. I now have the deed. When selling, will the attorneys cut a check to the original lender for the balance and then the overage payable to the name on the loan or to the seller on the purchase agreement? How are they directed to make checks payable?
By the way, when the owner signed the QuitClaim, the title company said that it was worthless because the legal description only listed the address, land lot, district and block. Said I needed to get a warranty deed instead.
The owner signed a POA for me to handle everything in regards to the property, even conveyance. I don’t want her to know that I’ve cured the loan but now need to re-do the deed. She may get amnesia. Can’t I just convey it on her behalf to my company using the warranty deed?
Do you see the mess you created as a result? You have a worthless deed and you have thousands invested in the property. Not a good thing.
It makes no sense to play this game if you don’t know the rules going in. Otherwise, you’ll get creamed.
DON’T USE THE POA TO CREATE A NEW AND IMPROVED WARRANTY DEED. Title companies HATE that and now you’ll have two worthless deeds to the property and create an even bigger mess.
Have someone who knows what they’re doing, an attorney or title company, close this thing. It’ll cost you less than 1% of the sales price and you’ll be able to rest assured that the deal you bargained for is the one you end up with.
Otherwise, you’re just asking to be someone’s lunch . . . burp.
Re: Disbursements at closing - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on June 29, 2001 at 10:28:06:
This sounds like a “subject to” type of deal to me. You take over payments (leaving the seller’s name on the note), and take title to the home. You are now the rightful owner of the home. When you sell, the closing attorney will cut a check to pay off the $90k loan, and cut a check to the owner of the property. Since you are the owner, that would be you.
In the future, you would be better off if you get a Warranty Deed instead of a Quit Claim, just because the WD is seen to be better by title companies. Just like you have discovered. You can get a WD when you buy and put the subject to clauses that mention the loans in the WD. Now that is not to say that the Quit Claim is worthless. The title company may think so, but maybe you need to find another title company.
When you say you have “cured” the loan : did you pay it off, or did you reinstate it by catching the payments up? It would probably be better to get her to sign a new Warranty Deed. If the POA covers a new Warranty Deed to your company, and you don’t want to get the seller involved, that would be the best way to go. You need to consult your attorney on this.
I’ll probably just do the WD myself. Is the consideration amount: the reinstatement plus the loan balance? Because the only funds that were exchanged is the reinstatement; And I’m buying it subject to the loan?
What attorney(s) &/or title company do you use(if you don’t mind sharing)? I was referred to this attorney’s office that had their own title company. I was pretty discouraged with their service. Title was promised by end of 2nd day. Got it end of 4th day.
And thanks, Tim, for the info & for not agreeing that my question was stupid.
If it were me in this deal, if at all possible, I would have the property owner sign the Warranty Deed to you, or your entity, vs. you as POA signing the WD to you. There may not be a problem here, if you proceed as planned, however, if the property owner ever got cold feet, even a year or two down the road, and claimed that she didn’t realize what she signed, in the POA, you could have a problem. At the very least, you would have to defend your position, and who knows what a liberal judge may say about this issue. Hopefully, it never comes up, but today, with consumer rights running rampant, and investors being called on the proverbial carpet for contrived issues, I wouldn’t take the chance of signing a document for someone, to my benefit.