Dont Just GET THE DEED - The Infamous Kitchen Table Closing

Q: Hi Lou, I have a property under contract that I want to resell/flip as-is to a rehabber/renovator, but I may have to purchase it quickly and simply record the Quit Claim Deed, without using a closing attorney or waiting for a title exam. I need your advice.

The seller just called me and left a msg on my voice mail stating she did not want to sell to me because she received a better offer. Now I do have it under contract, with a signed purchase and sales agreement from her, and I had her sign a Quit Claim deed, too. I did that because she was fighting with her sister over ownership of this property, which was given to her by her mom who passed away 2 years ago. The deed is in her name alone, not the sister's, moms or anyone else. I did see the deed and made a copy of it.

So, I thought I should get the Quitclaim deed, just in case I needed to record the deed because of the family issues, and she agreed as well. She said she just wanted to get rid of this property. I also filed at the court house an Affidavit for the property showing I had it under contract, as you all recommended. I'm in the process of getting a title check done by title company.

Now what do you recommend I do? Should I go back to the court house and record the Quitclaim deed or wait until the title search is done and record the deed, or walk away, or what? If I chose to wait and schedule an attorney to do the closing, would they except the title search done by the title company?

Thank you, G.

A: Hi G., what you're describing is a little risky, yet it's done pretty often. It's a VERY good idea to get title exam run first, before doing a "kitchen table closing" and getting a Quitclaim Deed (QCD) from Seller, if you're not using/hiring a closing attorney to do a formal closing....

Normally we wouldn't recommend you do your own closing, but since you're rushing your purchase so you can "preserve" your deal before the other Buyer moves in and buys it, and/or before the sister does anything rash?. just be sure that the transaction has been up front, and that you truly intend to move forward as you agreed. I think that I would go ahead and file/record the QCD. I don't see that you have anything to lose, and a lot to gain.

I would let the seller know that she can not sell to someone else because she already has a binding agreement to sell to you, and you already "technically" own the house (since you recorded the QCD), and that your plan is to review the deal like you had already agreed with her, and if you decide not to do the regular closing as described in your Purchase & Sale Agreement, then you will release the house (ie YOU'D have to sign and record another QCD, canceling the prior QCD from her to you) for her to sell to whomever she likes.

It was great that you already recorded your "Affadavit of Contract", putting yourself into the chain of title, showing that you have a contract to buy the house. Now if all of this "blows up" and you're not able to, or choose not to record the QCD for some reason, the Affadavit you recorded will protect you, and allow you to still purchase the house in the future (if the Seller tries to sell to someone else or tries to refinance the house).

By filing the QCD you become the official owner of the property. No one can take the deal away from you. Since you're buying it "subject-to" any loans, you will need to start making the payments on any loans (call the lenders to get a "statement of account" to make sure there are no surprise back payments or penalties you're "inheriting"). I'm assuming you gave her no/low equity/cash at this point, so you don't have any funds invested, or at risk with the seller. Now you've got time to evaluate all the financials and make an informed decision. If in the end, you do not want it, you can always Quit Claim the property back to the current owner, as you told her earlier.

**Note to all my fellow investors : you don't want to even play this "kitchen table closing" game, unless you have a strong indication that this is a good deal and you're 90% sure you're going to go all the way with this deal. Taking ownership via a quick recording of a QCD, and then bouncing ownership back to the original seller with another QCD later when you've "had a chance" to do your due diligence ? is not a cool game to play. We're only walking through it in this example, because the investor is trying to rush to protect his good deal from being "sold again" fraudulently, by the seller to another buyer.

But you also don't want to suddenly own a property where you have some potentially unknown, overlooked liens that may be attached to the house, that you'd have to pay off before you re-sold or refinanced the house, and no ability to insure yourself via title insurance,. So consider these 3 risks you've got with a "get the deed, kitchen table closing" --

1) You probably won't have the Seller sign the standard "Owners affadavit" and "Gap affadavit" that attorneys use, where the seller warrants that no other "bad stuff, liens, judgements, etc." exist against him or the property, other than what the title examiner has found.. AND even though Seller signs those Affadavits, we've had some sign knowing they're lying and committing fraud. Title insurance would cover you, if Seller lied, but you can't get that (see #3).

2) title examiners are human and make mistakes and overlook title stuff (liens, judgements) b/c they get too busy, too tired, etc.

3) You CAN'T get owner's title insurance to cover all of the above issues if you close the deal yourself at a "kitchen table", because an attorney at a closing can sell that policy to you and you DO need to buy one.

We have had several instances where either the seller has lied about other not-yet-filed judgements and loans (see #1), or title examiner has missed a significant lien during the title exam (see #2) and we've been covered by our title insurance policies.

If you have those types of title problems and NO title ins. policy, you've got to pay all the legal fees and/or pay off the liens, etc. before you can re-sell the property. Soooo, unless you're a serious gambler :-) close with an attorney so you can get the Seller to sign the 2 Affadavits and get yourself an Owner's Title Insurance policy.

And yes, about 50% of the time attorneys will buy a previously done (must be within last 30 days usually) title exam and use it for the closing--just ask your attorney in advance.

Now, if the new Buyer stills wants the property, they can buy it directly from you. The current homeowner, is of course, going to be upset and is probably going to say you did something illegal.

Q: Can the title company issue a Limited Warranty Deed, if not who provides a limited Warranty Deed that I have seen other wholesaler issue to the rehabbers?

A: The closing attorney can fill out a Limited Warranty Deed on your behalf as the seller (when you resell the property), saying basically that you warrant that ownership of the property was "valid" during the *limited* time period that you owned the house.

Best of success & abundance,

Lou Castillo

FREE! Real Estate Investing Secrets To Earning $100,000 Your 1st Year! -- 11 Overlooked Real Estate Statregies That Will Turn Your Investing Business upside Down And On The Fast Track TO Success...Guranteed! Plus A Bonus Track With A Secret So Successful It Can Double Your Investing Income Overnight!

http://www.Inv estorSuccessTactics.com

The Professional Investors Plan

The art of using high-leveraged activities.Here I would like to make just a few suggestions... Read More

Kings Bay, Saint Marys and Kingsland Georgia Real Estate - Mortgage Lenders

When looking for a home, it is important to first get pre-qualified with a mortgage... Read More

Successful Real Estate Investing

One of the best roads to wealth in America has always been the acclimation and... Read More

Staging® Your Home for Sale: a Superior Real Estate Home Marketing Technique: Part 1

Every Realtor KNOWS that a home should be shown in its best light to help... Read More

Property Investing ? Port Melbourne Life on the Edge

Property investing prices pick up following a cooler winter last year. Susannah Petty Reports.Winter has... Read More

Estate Planning

Estate planning can enable you to control your property while you are alive, take care... Read More

Things To Consider Before Buying a Condo Hotel or Resort Residence

Resort home ownership, such as condo hotels and fractional shares is different from typical home... Read More

Can I Sell My Private Mortgage Notes?

In this country millions of homes are sold every year. In most cases buyers go... Read More

Housing Froth Creating Imbalance for Consumers and Investors

Home buyers and sellers should think twice before jumping into over-heated real estate markets. Fed... Read More

Cutting Edge Real Estate, Is the Bubble Ready To Burst?

Of course, this is the big question in real estate now. . .Will the so-called... Read More

The Secret to Maximum Real Estate Profits: Lighting

Lighting is the most important detail of interior Design Psychology for selling houses. Lighting influences... Read More

Grab Your Dream UK Home On The Cheap - Property Auctions

Did you know that every year thousands of UK properties are sold at significantly below... Read More

Selling Houses Fast: Basics of Design & Color Psychology

Fixing up houses to ready them for sale includes a design plan for needed changes.... Read More

What Can I Realistically Earn In A Lease Purchase Business?

If you're looking at Lease Purchasing as a business, you'll obviously want to earn much... Read More

Preserve Equity, Build for the Future Using a 1031 Tax Exchange

Thinking of trading up on an investment resort property? If so, look into 1031 Tax... Read More

How to Buy a Property in Bulgaria

The CostAlthough the property prices in Bulgaria are quite low compared to the other European... Read More

Back To The Future - Big Changes Are Coming, Get Ready Now

The comments below are quoted from a recent speech by Ben Bernanke, a member of... Read More

Victorian. Modern. Colonial. What?s Your Architectural Style?

You are attracted to a home for more than its number of bedrooms and square... Read More

Home Selection Checklist - A Good Aid When Choosing a Home

This home selection checklist is a tool to help you select a home that is... Read More

Real Estate Investment - One Simple Formula

I saw the ads in our small-town newspaper for years before I realized exactly what... Read More

Make Your House Earn Its Keep

Did you realise that there is a lot you can do get an income from... Read More

Atlanta Georgia Real Estate - Marietta - East Cobb, Roswell, and Alpharetta

Whether you're a "move up" home buyer, downsizing, or relocating to the metro Atlanta area,... Read More

The Irish Property Market - Expensive But Worth It?

Lying on the edge of Europe facing out to the Atlantic Ocean sits Ireland, one... Read More

The New First Impression in Home Selling

As an ASP Home Stager® I know how important curb appeal can be in making... Read More

What Does It Take To Be A Donald Trump in Real Estate?

Since you are a business oriented person, you might be thinking: "oh, great, here it... Read More

How To Best Negotiate A House Deal

Whether it's selling your home or buying a home, more often than not you'll come... Read More

The Person With The Most Money Wins!

More money can mean better:- Health Care - Relaxing Vacations and Adventures -... Read More

Property Types A, B, C And D

One of the biggest problems individuals just starting out have is the type of property... Read More

Selling Houses: Cutting Edge Design Tips for Selling

In this article, you're going to discover new techniques for marketing houses, and you'll... Read More

Searching for CLUEs: What Homebuyers & Sellers Need to Know About Homeowners Insurance

Homebuyers and sellers should be aware about issues involving homeowners insurance and the C.L.U.E. ... Read More

Condos Vs. Condo Hotels For Vacaton Home Ownership

Condo hotels, also called condotels, are a relatively new concept in vacation home ownership. Rapidly... Read More

Take The Guess Work Out Of Your Wholesale Property Purchases

We have become very concerned by the number of readers writing to us asking how... Read More

Water, Water Everywhere on the Waterfront

Waterfront living is among the most desirable of locations in our area (Florida). The views... Read More

Listing Real Estate Online - Top Tactics for Boosting Sales

Listing real estate online can be a great way to let buyers know what is... Read More

Condo-Hotels ? A New Second-Home Alternative to Time Shares

Condo-hotels have evolved as a better, more reliable second home alternative to time-shares. They are... Read More

Property Investment Strategy: Securing Properties with Little or No Deposit

Property Investing often requires creative strategies to make it successful. Professional property investors often use... Read More

How to Sell Your Own Home and Save Thousands of Dollars

Most people take the easy way out when selling their home and hand the responsibility... Read More

Getting Started in Real Estate Foreclosure Investing

Decide to Invest in Real Estate Foreclosure InvestingWith the increase in Real Estate property appreciation... Read More

Finding Southern California Real Estate Foreclosure Property

Southern california real estate foreclosure:If you want to find southern California real estate foreclose property... Read More

7 Marketing Methods for Real Estate Coaches

You shower, shampoo, dress your best, check to see if you have plenty of business... Read More

Fixing Houses for Resale: Three Beginning Steps to Increase Profits and Have Fun

Real estate investors specializing in fixers make higher profits when they have a detailed work... Read More

How to Choose Your Real Estate Lender

Because you need quick action when applying for a real estate purchase loan, find a... Read More

Beat the Crowd when Investing in Real Estate

We all are thinking about it and some of us are actually taking action and... Read More

Yes But, How Do I Evaluate Buying Undeveloped Land And Get Into The Business?

These real questions on buying undeveloped land are answered by a US Master Builder and... Read More

Attention To Details Helps Homeowners Sell Fast In A Buyers Market

Your boss has just given you the career opportunity of a lifetime, but the job... Read More

Real Estate Season is Here

Yes, it has finally arrived. This is the time of year when the MLS or... Read More

Finding the Right Real Estate Agent:: A Guide for Seniors

When considering buying or selling a home, seniors have a special set of needs that... Read More

Best Places to Retire

Places to Retire: Popular Doesn't Always Mean "Best"Las Vegas, Nevada; Phoenix and Yuma, Arizona; Las... Read More

Crossing the Gap from this Home to the Next: Bridge Loan

So you're thinking of getting into a bigger house. You call up the real estate... Read More

Buying Land For Development Requires Careful Planning and Execution

From the desk of Colm Dillon ... Author "Residential Development Made Easy Hello Colm here... Read More