Newbie Advice Please? Tax Sale Property To Sell
What a great site! I have lots of questions but i'm betting most will be answered as i browse. I have to ask just ONE though, hopefully you all can help advise me on this?
Last November i purchased a vacant tax sale lot in michigan. I received a quit claim deed and am ready to sell the property. I've heard that many companies won't offer title insurance on a tax sale property and have found that i've either been directed to a company called "Tax Title Services, Inc" in CA who will do a preliminary certification and certification for about 1200k (for my lot, more for higher priced properties)and will transfer it to the buyer of my property OR to a lawyer who will perform a Quiet Title search on the lot.
My questions are.....which would be better? I have found a local lawyer who is qualified to do the search and is reasonably priced. I'm not planning on getting Title Insurance myself, is it a good idea to do this for the marketability of my lot? I stand to make enough money to pay for either *crosses her fingers* as well as have a profit left over....I'd appreciate any guidance given!
Lorien in MI, feeling like the future Real Estate Queen 
Hmmm, i posted this to the Beginner Forum, was it moved cause it was the wrong place?
I didn't really buy a Tax Lien, since MI doesn't do that anymore, but if it means i'm not a Newbie anymore than YIPPEE!
Quote:
On 2003-09-01 12:28, lorien wrote:
Hmmm, i posted this to the Beginner Forum, was it moved cause it was the wrong place?
I didn't really buy a Tax Lien, since MI doesn't do that anymore, but if it means i'm not a Newbie anymore than YIPPEE! <IMG SRC="images/forum/smilies/icon_smile.gif">
Lorien, congratulations on your purchase!
Glad to see someone taking action instead of just courses.
No buyer in his right mind would buy your property without obtaining title insurance. Since the property was you purchased was acquired from the owner via an administrative as opposed to a judicial foreclosure, the potential claims of others in the chain of title have not been extinguished. That is exactly what a Quite Title action does. Once that is done, there should be no problem securing title insurance and hopefully a buyer!
Hope this helps.
Bill
Thank you for your reply and encouragement, Bill. That's what i thought too. With this lot, it makes sense for me to do so, since it will make enough money to cover the cost. I do have another question though. What about those properties (vacant lots) that end up selling for $500 or so but only have a value of $3000? Obviously, there is money to be made there but it becomes eaten up with the costs of Quiet Title searching. As long as you let the potential buyers know that it's not been done, would it be ethical? Example: If you bought a lot for $500 (from what i've seen they're usually lots people bought for retirement/vacation homes in a newly developed subdivision but 10 years later have been let go and come up for auction), then sold it for $1200 to $1500 (when the FMV is around $3000) making sure the buyer knew they'd have to do a title search before building, all would be on the up and up?
*has a strong desire to be honest and still make money*
Also, anyone have any thoughts on lawyers vs Title Companies doing the Quiet Title stuff?
Lorien,
There is a difference betwee a title company certifying that a title is clear and a quiet title action. While the search company can find potential title "blemishes," they don't fix them. A quiet title action requires notice to all potential claimants and publication (in OK) and at the end of the day cuts off all claims that may have existed prior to the action. What could happen is you pay a lot of money to a search company, they find a title problem and then you still have to pay a lawyer to file an action. If there is any question, depending on your state's law, I would do quiet title suit. My three cents.
After reading more here and browsing the site, i made a call to a lawyer in the town next door (i live in a small place, no lawyers here!) and have an appt to talk with him later this month. He is older, specializes in real estate, comes highly recommended and is VERY reasonable. I'd rather establish a repoire with a lawyer and work with him/her in future deals as well, so i nixed the title company in CA.
On a side note, i received a verbal offer for my lot for 15k cash!! The couple knows i'm having a quiet title action thingie done and again has agreed verbally to pay half of the cost. I won't sell til i have clear title but BOY, this all puts a big on my face! I just needed someone to give me a shove in the right direction, i think! Glad to be a part of this forum, thank you!
Congrats on your deal Lorien, I'm literally drooling with envy over your great deal.
A word to the wise is- do be careful on your dealings with lawyers. I'm glad the one you found comes highly recommended.
You know, you can do your own title search with a little practice. All you have to do is go to where the abstract is stored armed with a legal description of the property and ask the clerk to pull the abstract. This is what a lawyer or title guarantee company will do. This will show all legal transactions made concerning this property.
I was given some bum advice by a lawyer that I would have to do a mini-probate on a property left me by my parents, and I was almost ready to hand him a big check when something told me to go look at the abstract and check it out myself. I found out he lied. When he sent me a final bill, I confronted him with his dishonesty and I never got another bill from him.
As far as any liens that might be against the property, that's another matter and I think you would have to go to the court clerk for that.....maybe. Does anyone have a take on that?
You should either do the quiet title action or you can sell it to somebody with a quit claim deed. If the buyer is fairly knowledgeable they may will accept a quit claim deed and save you the expense of a quiet title action.