Seller thinks I fell off the turnup truck. - Posted by Tim Jensen

Real Estate Investing
#1

Posted by JPiper on December 21, 2000 at 14:48:24:

It’s possible that a title company might accept such a pre-executed agreement…although I don’t think mine would. But the problem is that such an agreement could hardly contemplate all the possibilities that might occur in the future, such that I would believe that a court would not uphold such an agreement.

I would have to believe that if the title company were willing to accept this type of pre-executed agreement, they would also inform you that either party could revoke their consent to the agreement at any time if a dispute arose…thereby putting the title company into a legal quandry…the response to which is that they would hold the money awaiting agreement or court instructions on what to do.

It bears repeating that I’m not an attorney.

JPiper

#2

Seller thinks I fell off the turnup truck. - Posted by Tim Jensen

Posted by Tim Jensen on December 21, 2000 at 09:24:22:

Hi All,

I thought I would relay a funny thing that happened to me yesterday. I talked to a guy on Monday about buying a house he just took tax deed to. He wanted 15k I offered 8-9k.

He told me that he wanted to think about it. Which I said was not a problem, I added that I have cash and can as soon as he can get me clear title and a warantee(sp?) deed. With this the fun began…

He told me that he can get me a quit claim deed. I told him that I want a warantee deed. At that point he said that all the investors he has sold to have taken a quit claim deed. YEAH RIGHT! He finally relented, but I would have to pay for deed prep. He informed me that his son is a lawyer (that I know to be true) and that he would charge $300 to do the deed I laughed (to myself)and informed him that I can get a deed prepared for 35-50. He said that he will see and talk to his son.

Then I informed him that I will need title insurance and he agreed, but wanted me to pay for it. Not a problem here since I am getting a deal on the place.

From there I told him that if my offer was acceptable I could write up the sales contract and either have him look it over or fax it to his son. I added that I use the standard boiler plate realtors contract. Then he informed me that he saw no need to sign a contract. In fact, he wanted me to put the 8-9k in escrow at HIS title company and that we can close a week later.

He tried to tell me that he has always sold his tax deed properties this way. WHAT A JOKE! I have a feeling this guy must have thought that I did fall off the turnup truck. I am just curious if anyone else has had a similar experience with sellers?

MY thought is that he wants me to put the money in escrow without a sales contract then shop my offer for a week or even worse somehow try and keep my money. As for the quit claim deed, I have a feeling that he is having some problems with the title. I would be leary about taking a quit claim deed. I took one this year and when I went to get title insurance for a buyer the title company was reluctant to issue a policy. The only way the issued a titkle policy was when I produced the original sales contract.

Bottom line buyer beware!

Tim Jensen

#3

Re: Seller thinks I fell off the turnup truck. - Posted by dewCO

Posted by dewCO on December 23, 2000 at 19:38:50:

Piper is on the right track… Check with your title company before you get into anything you can’t get out of. (Tie it up w/ a CONTRACT though.) I’be been told that here in CO you need to bring a quiet title action in order for the title company to give you the type of free and clear title that you want. I’m involved (on the other side) with such an action, and it has taken 1.5 years, becaue some of the prior owners and people who had to be noticed that might have an interest in the property couldn’t be found!!! It could take a while to get the free and clear title.

#4

Tax Title Issues - Posted by Paul_MA

Posted by Paul_MA on December 23, 2000 at 02:01:52:

Tim,

I always sold my tax sale property by Quitclaim Deed. I could only sell what was deeded to me. Title insurance always did the trick.

But I can relate to your seller, because my buyers never asked for Warranty Deeds or title insurance. Guess they just weren’t aware.

A notebuyer once tried to trick me into signing a warranty deed. It makes you responsible for any past claims to the title.

When the title is searched, make sure the abstractor or attorney checks to be sure the county notified all the interested parties of the pending sale, sometimes including heirs of the deceased.

#5

Re: Seller thinks I fell off the turnup truck. - Posted by Roy

Posted by Roy on December 22, 2000 at 06:51:08:

There is only one problem!
NO CONTRACT.
Contract is always first before money, always, always.
(Except, Panhandlers).

#6

Re: Seller thinks I fell off the turnup truck. - Posted by phil fernandez

Posted by phil fernandez on December 21, 2000 at 16:27:58:

Hey Tim,

Most of the REOs that I buy from the bank are through quit claim deeds, but you better believe I make sure I get title insurance. Seems like this is the way the banks operate.

I’ve also gotten special warranty deeds from them on occasion. The key, I think would be your ability to acquire title insurance.

#7

Re: Seller thinks I fell off the turnup truck. - Posted by JPiper

Posted by JPiper on December 21, 2000 at 14:19:05:

I can see where a guy who just took title via tax deed might not want to convey the property by warranty deed. Might be the same reason I didn’t want to convey by warranty deed the last time I bought a defaulted note, foreclosed, and then resold the property. If you read the warranties that a warranty deed gives, it’s something to give some consideration to. Even REO’s are not sold with warranty deed (at least I haven’t seen one sold with one).

I would simply have the title checked out, and make sure you can get title insurance. I might have compromised with him and wanted a special warranty deed. When selling the property later just go back to the same title company. But it sounds like you worked that out to your advantage anyway.

JPiper

#8

Re: Seller thinks I fell off the turnup truck. - Posted by JohnBoy

Posted by JohnBoy on December 21, 2000 at 11:34:59:

“”“In fact, he wanted me to put the 8-9k in escrow at HIS title company and that we can close a week later.”""

Tim, when you’re the SELLER, don’t you require the same thing?

I wouldn’t do this with out a signed sales agreement that contained my conditions in it and written instructions as to what happens with the money held in escrow should the buyer or seller default, but aside from that, what would the problem be with it?

#9

Re: Seller thinks I fell off the turnup truck. - Posted by Rob FL

Posted by Rob FL on December 21, 2000 at 10:49:48:

Regardless of if you get a quit-claim deed or a warranty deed, make sure you get owner’s title insurance. Then when you go to resell, simply close with the same title company that issued the original policy.

#10

Re: Seller thinks I fell off the turnup truck. - Posted by Tim Jensen

Posted by Tim Jensen on December 21, 2000 at 15:09:33:

John,

I see no reason to put the money in escrow if he doesn’t want to sign a sales contract. Also, I can get this whole transaction finished in 48 hours of signing a sales contract. Why put anything in escrow?

Also, after reading Jim’s and others posts I may be willling to tak a QC deed.

Tim

#11

Re: Seller thinks I fell off the turnup truck. - Posted by JPiper

Posted by JPiper on December 21, 2000 at 14:21:21:

One problem with it might be that if the deal didn’t close for one reason or another, the title company won’t release funds without a release agreement between both parties. What happens if the seller refuses to execute the release agreement?

JPiper

#12

Re: Seller thinks I fell off the turnup truck. - Posted by JohnBoy

Posted by JohnBoy on December 21, 2000 at 14:36:45:

Could that problem be avoided with written instructions instructing the title company to release funds if the written instructions were signed by both parties?