I just purchased a house at a tax foreclosure in King county, Washington State.

The house is a junker and my intentions are to fix it up and sell it.

This was my first experience at a tax sale. I always buy non-judicial foreclosures which I'm fairly versed on the law with.

In my state of Washington county of King, the rules to the sale state:
"5. There is no redemption period after the sale except in cases where the owner on the day of the sale was either a minor child or a person adjudicated to be legally incompetent. In those cases, there is a three year redemption period."

I talked with my Title rep I have a relationship with and he said "I'm not aware of any Title companies that will write a Title Insurance policy on a property that is less than 2 years out of a tax sale."

I didn't realize possibility of not getting title insurance of this awesome deal I got.

Now I'm slightly concerned as I don't think many banks will lend on a property that can't get title insurance, thus taking away the MEAT of my possible buyers.

Needless to say my Deed from the tax sale still should be arriving within 60 days and it is drafted by one of the leading title companies in the area.

My QUESTIONS...

1. Is there a legal procedure (quiet title, release of interest, etc.) that I can follow to allow myself to rehab then sell the property quickly?
2. Will a conventional bank lend on a property that doesn't have a title insurance policy?

Hello p:

You have some pretty specific questions that involve a lot of money... No matter what I say, you're going to need the services of a real estate attorney to (1) either fix it for you, or (2) attempt to unwind you from the transaction...

However, not knowing anything about the situation, it would seem to me, that you COULD get title insurance if you could PROVE that "..the owner on the day of the sale.." WAS NOT "..either a minor child or a person adjudicated to be legally incompetent".

Certainly, that information can be obtained by a little investigation. Why don't you ask if a title company would issue a policy if that UNKNOWN became KNOWN?

excon

I don't know of any rule that there has to be title insurance, in fact it was never even mentioned in the dozens and dozens of properties I have bought.

I have bought dozens of tax sales and it is the buyers problem to get title insurance, and of couse the tax sale clears all but IRS liens, so you make sure there are none,

Next you carry the note, use a contract for deed to sell the property, you end up making a lot more money normally , exp on run down property.

Chuck,

I would like to get a cash out buyer on the property so I can work my money elsewhere. I'm not interested in doing owner financing. On your past sales what state were you in? Did you ever flip any of them and have the buyer order a title insurance policy at closing? Doesn't the bank want to use this policy as well?

There are no IRS liens (this is always a primary concern). I guess the question becomes how do I prove that the previous owner was NOT legally incompetent?

I thought a signed document or something like that would work best, but someone has had to have done this before.

Regards,

Let me see I have bought tax sales in
New York, Tenn, Tex, OK, GA, Al and MO for sure, maybe a few more states.

Most of them were flips, did owner finance on about 1/2, I perfer that since I make so much more money, I sell and foreclose, sell and foreclose and then finally do a full sell ( bank finance) on about the 2nd or third foreclose.

You find the original owner and get them to sign you a release, may cost you a few hundred of dollars to talk them into signing but worth it.

Chuck,

You do sound like a PRO! I've bought a lot of non-judicial bank foreclosures, which are quick, easy and painless!

This one is a little different. We have 2 owners I found out (brother and sister). Sister was aware of the sale and let it go for reasons unknown (county tax lady said that she won't talk with her brother anymore).

I'm going to try and get the previous homeowners to each sign over a quit claim.

That should be fine for making a proper chain in the title and obtaining title insurance right?

As I said before there were 0 liens on the property and no mortgage.

Chuck, I know you post on here a lot, but do you also run workshops on your strategies? I don't know if you've lived in all these states, but I would very much be interested in clearing cloudy titles for the rest of my natural life as I do feel I have a decent knack at helping people!

Thanks!