My source of properties (vacant lands) is tax sales. I am happy with this arrangement, but it does mean that my properties will always come with quitclaim deeds. I would like to be able to sell them with special warranty deeds; from watching Seth’s video on this instrument, my sense is that, so long as the title indeed was not challenged during the time I owned the property, I can do it.
Can people comment on this? I know you can’t provide legal advise and I am not asking you to do so. I am asking, rather, for your to describe what your experience has been.
@syasturi you always ask the best questions. I can always tell you’ve thought through these issues more than most people do!
Disclaimer: The following is not legal advice, I’m not an attorney.
As you know, a Special Warranty Deed only guarantees no title issues occurred during your ownership, so while you could theoretically sell a property where the title was a mess prior to your ownership, I think it’s still a best practice to try and clear up these issues before you re-sell it. Selling properties with a clean title boosts buyer confidence, makes the property more marketable, and protects your reputation as a seller. While it wouldn’t be required, clearing the title can help facilitate a smoother transaction for all parties involved.
If you can’t or don’t want to resolve those issues, then just use a Quit Claim Deed when you sell, so you’re not held liable for anything whatsoever. A QCD should make it clear to the buyer (and anyone else researching the title in the future) that it was the buyer’s responsibility to do their title search to understand the situation and buy at their own risk.
You would want to sell on a Limited Warranty Deed or Special Warranty Deed to limit your liability. The problem is that you don’t have marketable title because you have not done a quiet title action to foreclose out the previous owner’s rights in the property. No title company will not insure your title