Is a closing necessary in Texas to sell a house? Property is in foreclosure and I'm trying to sell it to to someone before the sale date>

Asked by Mikedob, 77084 Tue Aug 30, 2011

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Guy Gimenez, Agent, Austin, TX
Tue Aug 30, 2011
If your property is scheduled to be foreclosed, anytime up to and even at the foreclosure auction, you (or a buyer) can make up the back payments (and late fees, attorney fees, etc.) and reclaim the property.

A seller can transfer possession of a home to a buyer at any time without a closing by simply deeding the property to the buyer, however, you would still be obligated to pay the underlying note should the buyer fail to do so. And most buyers would want some assurance of clean title prior to chunking down any money for your home.

So, the answer to your question is no, you don't have to close at a title company even though most buyers would require this except in rare instances.
Web Reference:  http://www.phgbrokers.com
1 vote
Dan Tabit, Agent, Issaquah, WA
Tue Aug 30, 2011
Miedob,
Closing is generally the transfer of ownership from one person to another. All liens would need to be cleared, which means your debt would be paid off and title would be clear. If you can successfully sell your home before foreclosure, the foreclosure would be avoided.
If you have lined up a buyer, get to a title & escrow office or an attorney to address this as soon as possible. If your buyer is not paying enough to clear all the liens, you are doing a "short sale" and you will need help to get the lenders approval. Short sales take time and may allow for the delay of the foreclosure, but you need to make them aware ASAP and get some help. Do not try this on your own.
1 vote
David Tansey, Agent, Houston, TX
Wed Aug 31, 2011
Any buyer that bought a foreclosure without a title company closing is setting themselves up to owe any out standing liens, debts or judgesments against the property. Actually, that holds true for any purchase.
Web Reference:  http://www.DaveRealty.com
0 votes
Al Geffon, Agent, Houston, TX
Wed Aug 31, 2011
So let's summarize this ...

Technically you do not need to formally close at a title company, but why would anyone buying a property want to take the huge risk of having any ownership issues? And why would the seller want to be exposed to litigation, if it turns out that title is not "clear?" That's what title insurance is for. So from a legal standpoint, I guess that one does not need a formal closing ... but from a practical point of view, I wouldn't touch such a transaction, nor would I advise any client to even consider it.

I'm getting the notion that you're attempting to circumvent not only the balance due on the loan, but any late fees, penalties, taxes and other charges. If this is the case, the new "owner" could never get clear title to the property. If, however, you have a buyer who will satisfy all conditions (financial and otherwise ... in all probability a cash sale), contact your lender immediately ... they'll be more than happy to take cash over yet another foreclosed home. At this stage of the game, I wouldn't even think about a short sale. Despite what you may read, they usually take months, and the latest figures show a 27% success rate (i.e. three out of four deals fall apart). With a scheduled sale date, I just don't think you have any options. Good Luck.
Web Reference:  http://ww.har.com/algeffon
0 votes
Creacia Will…, Agent, Houston, TX
Wed Aug 31, 2011
There is no law that stipulates that you must close at a title company. However, if your home is in foreclosure youbwill need permission from the bank to do what is called a Short Sale. This is a process frequently done when a homeowner is unable to keep up with the initial payments on a property. In most cases the buyer owes more than what the property is currently worth. The bank will then have to negotiate with all of the lenders involved with in the loan along with any commissions, back due taxes, HOA dues and any other fees that may be accessed to the property. Texas forecloses on the first Tuesday of the month which would mean you may have a sale date of September 6, 2011. I am a SFR which is a certified Short Sale Foreclosure Specialist, I would like to try to help you prevent your home from being foreclosed. Please call me Cre Williams 713-539-4447
0 votes
Jim Mcninch, , Houston, TX
Wed Aug 31, 2011
Mike:

There is another possibly more important point here. You stated your home is in foreclosure. In order to stop the foreclosure the lender(s) will need a payoff of there existing loans plus any late payments, foreclosure costs, etc. This payoff is required before the foreclosure date. If you owe more than the current market value of the property, the only way to sell the home would most likely be whats called a short sale.

A short sale is where the loan payoff is negotiated with the lenders to a lower amount to enable you to sell the property at or below market price. The lenders will typically pay all closing costs and realtor commissions as a part of the short sale. In this case, it would have to be done through a title company or Fee Attorney - but again these costs would be included in the lenders approval.

We specialize in short sale transactions and have Certified Distressed Property designations. If you need more information please call me at 832-330-4588.
0 votes
Guy Gimenez, Agent, Austin, TX
Tue Aug 30, 2011
Mikedob, there is absolutely no law or regulation in Texas that requires a title company to participate in transfer of real property. Any assertion to the contrary is absolute nonsense.
Web Reference:  http://www.phgbrokers.com
0 votes
Bruce Lynn, Agent, Coppell, TX
Tue Aug 30, 2011
I've never thought about this but technically I guess you don't have to, but as a buyer of a home I would never want to do it. Probably as a seller I would not want to do it either. Using an escrow agent helps keep everyone on track in the process. This helps ensure your loan gets paid off, tax credits get prorated, and you get any balance if there is any in an orderly process before you sign over the deed to the buyer.
Web Reference:  http://www.teamlynn.com
0 votes
Amanda Nicod…, Agent, Spring, TX
Tue Aug 30, 2011
Yes, you need to 'close' at a title company in order to sell your house before the foreclosure date. Do you already have a buyer? If you already have a buyer that's approved for a mortgage loan, you can contact the lender to stall the foreclosure. They may or may not work with you; that depends on the lender. However it you have a cash buyer, the lender will be more likely to accept the sale.

How much are you selling the house for? Are you selling it for the amount of the mortgage loan that you currently owe? Are there any penalties and/or late fees that you owe? Do you have funds left over to cover your closing costs?

Beware of scammers that prey on homeowners that are in default. Make sure you do your due diligence before proceeding.
Web Reference:  http://www.amandahomes.com
0 votes
Larry Stovall, Agent, Cypress, TX
Tue Aug 30, 2011
Even if you owned the property outright and you have a buyer who will pay cash you would want
a title company to handle the transfer of ownership to protect buyer and seller.

It's like the attorneys say,"Anyone who represents themselves at trial has a fool for a client".
0 votes
Traye Wise -…, , Houston, TX
Tue Aug 30, 2011
I buy homes that are in foreclosure. Call me to discuss the details. 713.907.4233. To answer your question, yes we would need to go to a title company to close.
0 votes
D. Paul Cemer, , Houston, TX
Tue Aug 30, 2011
What you are describing sounds very much like an assumption. You have to first be sure that you have an assumable loan. Many are, and many are not. In the case of a loan assumption, you would still find yourself at a title company at some point or another trying to finalize the sale, and that would be your "closing".
0 votes
Al Geffon, Agent, Houston, TX
Tue Aug 30, 2011
I don't completely understand the second part of your question ... I believe you mean that the home is coming up for auction. But it's actually immaterial in this case. I can't see how anyone would even consider buying a property (irrespective of its status) without being assured that the title will be free of any encumrances ... and there are a bunch of other bureaucratic gyrations necessary to transfer ownership. So my answer would be yes.
Web Reference:  http://www.har.com/algeffon
0 votes
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