Home Buying in 93065>Question Details

The Stahl Gr…, Real Estate Pro in 91361

Risks of Quit Claim Deeds from Online Auction Houses?

Asked by The Stahl Group, 91361 Sat Nov 2, 2013

We are looking at purchasing homes through auction.com's online auction platform, but they are only offering Quit Claim Deeds upon purchase. What are the risks?

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It is a very very weak document. The seller/entity/person is just releasing their interest in the property, if any. There is no guarantee or warranty that you are getting clean title to the property. I can give you a quitclaim deed on any property even if I don't have interest in it.

Yes consulting a Real Estate Attorney is the right thing to do, I can refer to one that I work with weekly on my Short Sales for the past 6 years.

Unless you can get a title insurance policy backing up free and clear title to the property you are interested in, the risk is very high that the title may be encumbered with costly items to clear.

California does not use Warranty Deeds. The Grant Deed backed by a title policy is the normative practice in California. See California Civil Code section 1092.

Ted Mackel
Broker BRE 01224852
(805) 432-7705 cell/text

Please visit my Real Estate blog at http://www.HomeBuysBlog.com
2 votes Thank Flag Link Sat Nov 2, 2013
The main risk you face right now are that you are going to get responses from people who didn't go to law school and specialize in RE law.

My first move would be to contact a RE lawyer licensed in the state where the transaction is going to take place. Free "legal" advice on a public forum is usually worth every penny.

Good luck!
1 vote Thank Flag Link Sat Nov 2, 2013
No Title Insurance Policy, no title search, no warranty deed.
You should consult with an attorney before proceeding.
1 vote Thank Flag Link Sat Nov 2, 2013
Frankly, I have purchased three properties that HAD title insurance policies through Auction.com. I have gotten excellent buys, HOWEVER the homes that they offer WITHOUT title insurance ought not even be allowed! It just does not make sense as to why a lender who forecloses PROPERLY on a homeowner who is in arrears, would place themselves in a position of doing this! I agree with the other agents who have posted here. Also, PLEASE be aware that the OCCUPIED foreclosures that they offer at Auction.Com can also lead to a real mess What if a tenant is occupying the property and that legitimate tenant has a binding, legal rental agreement on the $300,000 home you have purchased, for $800. a month rent for 10 years? I have seen this. Proceed with caution Check out all the facts. Get a title insurance policy ready BEFORE the auction and do not get caught up in the opening bid $$$ figure they show! Its a teaser price. Expect the property if its in a desirable area to sell at 15-20% less than current market prices; generally not less than that. Good luck.
0 votes Thank Flag Link Sun Mar 30, 2014
I wouldn't recommend purchasing a home where the seller is only providing a quit claim deed. You need title insurance to protect your investment. You could spend thousands and learn you inherited thousands more in existing liens. Consult with a real estate attorney regarding the risks involved.
0 votes Thank Flag Link Mon Nov 4, 2013
If what you say is correct What the seller is doing is selling you the property complete in such a way that you inherit the liens. I would not do it. I am thinking that is not correct however. If you get a mortgage on the property we would require a grant deed and a title policy and liens to be taken off.
0 votes Thank Flag Link Mon Nov 4, 2013
The only risk is that you wind up with a worthless document in exchange for tens or hundreds of thousands of dollars, Josh!
0 votes Thank Flag Link Sat Nov 2, 2013
Josh, since you are a licensed agent yourself, you need to be extra careful if you are representing a client with these auction transactions.
Definitely follow the advice below and talk to an attorney.
0 votes Thank Flag Link Sat Nov 2, 2013
Consult a real estate attorney for sure. The few hundred dollars you spend on an attorney can save you many thousands of dollars and headaches later on. This can be very complicated.
0 votes Thank Flag Link Sat Nov 2, 2013
At the very least you should have a real estate agent to help you. And if you are careful you should get a real estate lawyer to make sure you are protected. Home auctions can be very dangerous if you do not know what you are doing.

Alex Greer
Loan Officer
NMLS #1056079
http://www.TheMortgageOutlet.com

408-352-5147
AGreer@TheMortgageOutlet.com
0 votes Thank Flag Link Sat Nov 2, 2013
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