I Have A "John Beck" Question.....nothing Negitive :)
I was watching the infomercial John Beck has on making money on tax sale properties, and one part said that this one lady bought a tax lien and then sold the house to someone else in a few weeks for a nice profit.
I thought that if you bought a tax lien, you'd have to wait 6-24 months to get the tax certificate deed to the property.
Please tell me what I'm missing, if I'm missing anything at all....
Thanx-
Joe Oh,
You did not say what state your in, but here in Mo. if you buy tax property on the fourth + time it is offered, you get a collectors deed that same day. You are then free to sell anytime. Rick
Joe--(OH)--------------------
Many of the examples of John Beck came from Oklahoma state, where I have bought certificates and have bought houses on the county tax resale auctions.
In OK, those liens which are not purchased by investors at the tax sale are sold to the county. Until a couple of months ago it was possible to buy tax liens "over the counter" by assignment from the county after the initial tax sale.
If one bought them toward the end of the period for te property owner redeeming the property, one would be able to start immediately going for a tax deed to the property. After about 10 weeks or so, one would get the deed and could thereupon resell the property to a new owner. The new owner would not be able to get title insurance on the sale.
Last month I bought a house in OK for just under $355 at the county tax resale. Got the deed last Friday.
Good Investing************Ron Starr*************
So does the same hold true for Ohioans? or can someone from ohio tell me how this works so when i get the money togeather, I can do it right
Thanx
Joe Oh and Rick,
You're right Rick that "here in Mo. if you buy tax property on the fourth + time it is offered, you get a collectors deed that same day. You are then free to sell anytime." However, the county collector here was good enough to warn me that title insurance may be difficult to obtain. In response, I called two local title insurance providers and each one said you can not get title insurance based on a collectors deed. I'm told that there have been to many legal "ownership" actions challenging that deed for title insurance companies to accept the risk. However, one provider did say they will issue insurance if the collectors deed is 20 years old! So, who is going to buy property from a person with only a collectors deed if the buyer can not get title insurance?? The only thing a person with only a collectors deed can do is use the property for themselves or rent it. Selling would be, it seems to me, impossible. The helpful county collector said a person with a collectors deed may go to court to "quiet title" to get a court ordered title that would be solid enough to get title insurance. So, I called a real estate attorney and asked what would be an average cost for that and he said $2,000 for attorney, court cost and newpaper publication. Has anyone out there experienced this problem with Missouri collectors deeds?? Larry
Larrygs
Try to contact a company called Tax Title Service. They offer title insurance on Tax Deed Properties without having to file a quite title action...
I have never used them, so if you contact them or use their services let us know how it went. Here is their website:
http://www.taxtitleservices.com/index.html
Larrygs--(MO)-------------
I have sold several properties bought at the OK tax resales without any title insurance.
Don't make assumptions about what you can and cannot do. Try it and see. Some may not know that they "should" have title insurance. Some may not worry about the title since it came from a tax sale and so not even try to get title insurance.
If the buyer needs an institutional loan to buy the property, the lender will require title insurance on the loan. So those buyers cannot buy. If the buyer has f riends or relatives that will loan purchase money without requiring title insurance, that is another way for the deal to go together.
However, people who pay all cash can buy without title insurance, if they want to do so. What might motivate them to do so? A low price, perhaps?
You can also offer owner-carryback financing for buyers. You are probably not going to require yourself to provide title insurance are you? You might be able to resell that loan, probably at a discount, although some investors won't touch it because of the lack of title insurance. Many other people will be thrilled with a well-secured loan paying them 7, 8, or 9% a year return, and won't require title insurance.
You might also ask the title companies if you could get title insurance for a buyer if you were to get a quit claim deed to the property from all those on title at the time of the tax auction or tax deed recording.
If you shop around, you probably will be able to get a quiet title lawsuit done more cheaply than the one attorney quoted you.
Good Investing************Ron Starr**********
Thanks Rick...
You comments about being able to sell tax deed property without title insurance were interesting.
There certainly are people out there that don't know the repercussions of not getting title insurance. One of those people contributed to this Tax Lien Forum about purchasing two tax deeded lots in Florida and is now looking for help. That person, I suspect, feels cheated. I think disclosure of this problem is best for all concerned. If they go ahead and buy (as you say, maybe the price is irresistable) that works. I live in a county of about 50,000 people and if I sold them property without disclosure I'm afraid I might get a midnight visit from them (or a daylight visit from their attorney).
I'm wondering if the County Collector will disclose this problem when the tax sale is held. I can see where she may have had some angry buyers with collector's deeds complaining to her about not being able to get title insurance. Her attitude may be "buyer beware" and not disclose it. I'll attend and find out.
Larry
Of course there is nothing to stop you from filing the action yourself. You do read and write English? If at all troubled go to the nearest Law Library, research similar actions and go do your thing.
Here in LaLa land we do not have that problem as we buy at a Tax Sale.
However all my life being a very basic and cheap person I buy properties that are behind in their taxes up to about 4 years. I open a title report and if I do not like what I see I cancel at the Preliminary level and the fee is very small and in many cases because of the volume I do there is no charge. I in many cases find myself collecting quit claim deeds from those who have a color of title. No no not crayons. A relative, or a son or daughter who was not mention'd in a will or the party died without bothering to as they say Paper the Occasion. Then I collect the deeds and in I go to the Arb Officer at the title company. I sit on his desk and shovel papers at him. If he has an objection then let him state and I will go out and find the person or thing and get proper releases. They then will issue a Title Policy. You can always file the action in Superior Court and get a Judicial Decision that affirms your position. Relly it is not hard. Most of the attorny's do not have a clue. They have to get their ParaLegal to do it for them. Of course for about $2,500 you can get the whole thing on line. Fill out the pleadings on line. Just sign the names. I love those programs. But you know going into their offices after work just to play on their computers is crappy. I have got to find a way of dialing into their Legal Programs. That would be a goody.
Now remember dear friends there are many occasions when such insurance is not necessary. There is no use guilding a paper horse if there is no rider.
But then I am old and gray and when I was young I did a lot of Abstracting for Attornies who were too deep in their cups to find their way to the Hall of Records. The application of common sense an item most scarce will solve most of these problems.
Cheers Lucius
Larrygs---------------------
I like Lucius' comments to you and second the idea of doing your own quiet title lawsuit.
You can read the law books and do it. I have the paperwork from about three or four such lawsuits filed in courts in OK. So, I have models of how to proceed. You can probably do the same.
Usually there is no response from the former owner(s) or heirs of the former owner(s). If there is a response, you can then hire an attorney if you feel it necessary. Perhaps to consult with you, perhaps to take over the lawsuit for you.
Another possibility: have an attorney do the first two or three lawsuits for you, with you asking a lot of questions along the way. After that you might be qualified to do your own quiet title lawsuits.
Good Investing************Ron Starr************
Larrygs---------------
You mention disclosures. I wonder what disclosure one might make about lack of title insurance on a property?
Something like "Many people like to have title insurance on a property when they buy it. It is my belief that you might not be able to get title insurance on this property that I have for sale, as I bought it at a delinquent property tax auction."
"Many people advise getting title insurance when you buy real estate. It is my belief ... "
"You are thinking of buying a property from me. I advise you to consult with an attorney about this purchase."
"If you buy this property from me you might not be able to get title insurance on it should you want to resell it."
I'm just not sure what sort of disclosure one should use.
Good Investing*************Ron Starr************
Hi Larrygs,
Check with a local title company. Just because it's a tax sale property doesn't mean you can't get title insurance from a local company. Doesn't hurt, or cost, to ask.
Many times it's as simple as getting a Quit Claim deed from someone.
Steve