S. California Tax Defaulted Sale....where Can I A Title Insurance?
Let's say i bought a parcel from tax defaulted sale....Which title company will give me a title insurance? I called one title company(northern american) and they don't give me the title since I bought the house from the defaulted sale. Do you know which title company give a title insurance?
Welcome smithbabo,
You do NOT need title insurance because what you win is what you get so do you do diligence before you buy.
Tax defaulted auction is not your regular sell so YES, title insurance companies will not sell you insurance because the request is unrealistic and unless weed abaitment and IRS liens are there, the title would be clean because Tax liens take priorities over all private liens.
Got it? Good luck!
Thank you, Omega 1. But i heard that, if you don't have title the house, then you can't sell it for full price. I would like to get house and sell it quickly as possible as much possible or full market value. How can I do that?
I am sure that another investor might give more detailed answers but I would start a quiet title action with the help of an attorney (as I am not experienced in this) to clean up the title. I helped an broker in SLC do this by getting the former owners to sign a "quitclaim" for $100 a person. He was then able to get a good title and title insurance.
smithbabo--(CA)------------
All investment approaches have advantages and disadvantages. Buying tax sales properties in CA has one clear disadvantage: you will not get title insurance on the property or your buyer will not be able to do so for at least one year from any title company, and perhaps longer. There are a couple of exceptions: if you can get all people who had ownership of the property at the time of the auction to sign a quit claim deed to you, or if you do a quiet title lawsuit in the county superior court.
In most populous CA counties the quiet title lawsuit is likely to take close to a year, perhaps more than a year. Thus there is little reason to do that way. You might want to call the court and ask how long it takes such civil lawsuits to wend through to completion.
If you can find somebody who will pay all cash for the property, you might be able to sell it with no title insurance, should the buyer be willing to do this. You might also consider selling the property with you carrying back a loan for the amount the buyer neeeds. Then, after it is possible to get title insurance, the owner should be able to get a new institutional loan and pay you off. This assumes that the buyer has reasonable credit. If the buyer does not have such good credit, you likely should not sell to him/her/them.
You might want to call around to other title companies and find out whether they would offer title insurance a year after the recordation of the tax deed.
Good Investing***********Ron Starr************
Does this mean, that you will not automatically have title to the property upon winning the bid and buying the property from that auction?
How else can you sell the property?
Raven2k12--(CA)----------------
No. You must distinguish between having title to a property and being able to get title insurance on a property. These are two different things.
You get title when the tax deed is recorded in the county recorder's office by the tax collector. You get title insurance when a business, a title insurance company, is willing to issue you title insurance or issue it to your buyer or lender.
One can sell property that one owns without the buyer getting title insurance. It is just that most buyers want the title insurance. And all institutional lenders and most private party lenders will want title insurance on their loans. So, if your buyer is going to be borrowing money to purchase the property, they will probably not be able to buy until they can get title insurance.
Also, should you want to get a loan using the property as security, you will not be able to borrow from an institutional lender until they can get title insurance on their loan.
Good Investing******Ron Starr*********
Thanks for your reply, Ron. I was just confused, because I was seeing posts on this forum, that read there were quiet title lawsuits, or something of that matter. I didn't understand what that meant.
What would you recommend, in regard to getting title insurance? Is there any other way, besides waiting one year to get it?
Thanks for your help, Ron!
Raven
Raven2k12--(CA)---------------
Yes, you can do a quiet title lawsuit in the county superior court. Call to ask them how fast such a civil lawsuit is likely to get through the court system. My guess is in LA that it will be more than a year.
As I said, you can sell without title insurance, if you can find a buyer who does not want/need it. You can also carry the loan for the buyer until they can get title insurance on their own and refinance with an institutional lender.
Also, if you get quitclaim deeds from all the people who were on title at the time of the sale, you can probably find a title company that will issue title insurance. If there is excess proceeds, you might get the deeds from the form owners by helping them apply for the excess proceeds or paying them $100, $200, or whatever for their signatures. They have already lost the property, so this is just added money for them.
Good Investing*********Ron Starr************
Does that only apply to vacant land?
Or both vacant and improved. So, if you buy anything at the tax default auction you can not obtain title insurance for generally one year after the auction?
Please correct me if I am wrong.
rxy70--(CA)---------------
I've never heard of a title company in CA giving title insurance on a property bought at a tax sale until at least one year after the tax deed was recorded.
Some title companies want to wait 5 years to issue title insurance on tax sale properties unless you get quit claim deeds from the former owners or do a quiet title law suit. They are very happy to take your money to issue you title insurance after you have spent your money doing a quiet title law suit and there is no risk for them.
Some will not issue title insurance at all until you do a quiet title law suit. You need to talk to different companies about their policies. And it may be different in different counties.
What makes you think there would be any difference between their treatment of improved and unimproved properties?
Good Investing************Ron Starr************
Thank you RonaldStarr,
I was just wondering if there was a difference. I was at the auction on monday trying to purchase something, but it was a waste of time and effort.
But again thank you for your answer. I understand now.