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What Da! Quit Claim Deed Instead? |
rubyarias
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Posted: 23:50 on 08-04-2008
I just closed on a cash property located in Michigan.
The contract that both parties signed reads, "Seller waives and releases all ownership and interest in the aforesaid property and grants full ownership to Buyer by General Warranty Deed at official time of close".
I just received in the mail a Quit Claim Deed along with a Settlement Statement and an Acknowledgement of the same signed by the title agent.
The Quit Claim Deed was signed by one of the signers in the original contract on behalf of the company that owns the property. Shouldn't both signers have signed the Quit Claim Deed? Can the other signer come back after and make a claim?
Per the title co. a search was conducted, but nothing was found to be owed or any liens on property.
Shouldn't I have received documents showing what the search concluded? Shouldn't I have received title policies, exclusions, etc.
I did not receive any disclosures whatsover, ie. lead.
There is no legal description statement provided by title co. How should I know If what is on the Quit Claim Deed is correct? The description on the Quit Claim Deed does not show the same information as in Wayne County. The desc. showing on the Deed does not say anything about lot size and some stuff is also different. Shouldn't it be exactly the same?
Also the Quit Claim Deed shows an incorrect Parcel Number. It is off by one number.
Also in the cover letter it states "The current tax bill due August 31st is $1,1118.61". I check zillow and the 2007 taxes were $1800. Why am I now told of a bill when I'm purchasing a month before it's due? The settlement statement says nothing about property taxes. Shoudn't they collect from seller to pay taxes due next month?
I have never received such a short package at closing.
I need your advise.
[ Edited by rubyarias on Date 08/04/2008 ]
[ Edited by rubyarias on Date 08/05/2008 ]
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cjmazur
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Posted: 01:22 on 08-05-2008
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On 2008-08-04 23:50, rubyarias wrote:
I just closed on a cash property located in Michigan.
The contract that both parties signed reads, "Seller waives and releases all ownership and interest in the aforesaid property and grants full ownership to Buyer by General Warranty Deed at official time of close".
what both parties, 2 sellers
I just received in the mail a Quit Claim Deed along with a Settlement Statement and an Acknowledgement of the same signed by the title agent.
I would call the title company for clarification. I would prefer a title policy rather than a warrenty deed.
The Quit Claim Deed was signed by one of the signers in the original contract on behalf of the company that owns the property. Shouldn't both signers have signed the Quit Claim Deed? Can the other signer come back after and make a claim?
Sounds like a correction deed might be need. The titlle company is responsible to verify that the person is an authorized signer of the entity.
Per the title co. a search was conducted, but nothing was found to be owed or any liens on property.
You should have access to the pre-lim during escow.
How did you complete your DD w/o reviewing the title?
I did not receive any disclosures whatsover, ie. lead.
That is federal law. someone was very sloppy.
There is no legal description statement provided by title co. How should I know If what is on the Quit Claim Deed is correct? The description on the Quit Claim Deed does not show the same information as in Wayne County. The desc. showing on the Deed does not say anything about lot size and some stuff is also different. Shouldn't it be exactly the same?
Yes.
Get intouch with title.
Also the Quit Claim Deed shows an incorrect Parcel Number. It is off by one number.
opps
Also in the cover letter it states "The current tax bill due August 31st is $1,1118.61". I check zillow and the 2007 taxes were $1800. Why am I now told of a bill when I'm purchasing a month before it's due? The settlement statement says nothing about property taxes. Shoudn't they collect from seller to pay taxes due next month?
check if the are paid in arears.
<font size=-1>[ Edited by rubyarias on Date 08/05/2008 ]</font>
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rubyarias
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Posted: 11:39 on 08-05-2008
The title agent just wrote to me telling me....
That the state of Michican does not accent "General Warranty Deeds". And that a Quit Claim Deed is an appropriate and suitable substitute.
He also says I am not entitled to a copy of the title search because it was ordered and paid for by the Seller.
He also says I should pay the bill due August 31 because in the agreement it says I will pay transfer tax, and prorated tax.
In my other properties I am prorated from the time I purchased. I did not know that transfer tax means I have to pay his portion.
I'm still learning... But does it sound right to you regarding not being able to get a copy of the title search report? What do you guys know about the state of Michigan not receiving Warranty Deeds. That deed should be more suitable than Quit Claim Deed. If I buy title Insurance policy then will it matter that it's a Quit Claim Deed?
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stdavid
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Posted: 14:34 on 08-05-2008
Perhaps it would be worth the money to pay a real estate atty for an hour to look over the docs and make sure everything is correct.
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ypochris
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Posted: 15:07 on 08-05-2008
Ruby,
In Michigan the deed you are looking for is called a "warranty deed"- a quit claim deed is NOT "an appropriate and suitable substitute" for a general warranty deed. The quit claim deed offers you all right, title, and interest that the seller has in the property named- and the seller has NO right, title, or interest in the property named, as the parcel number and legal description are not describing the parcel they actually own.
Pro rated taxes means you pay the taxes from the time of sale to the time they are due. Normally you would be CREDITED the taxes for the past eleven months by the escrow agent- they would be deducted from what you owe, then you would pay the entire tax bill when it comes due.
You should have received a title policy commitment- the actual policy is issued later.
It is difficult to determine who in a company is authorized to sign off on title to a property- you would count on your title company to ensure (and insure!) that the title is legit.
Taxable values have gone down in parts of Michigan- don't check zillow, go directly to the assessor's office's web site for the city or county in which the property is located and get the proper assessment amount.
At the very least, I would insist on a warranty deed with the proper legal description and parcel number, and a title commitment letter from the title insurance company, before I would sign off on this deal. At best, the escrow officer is shoddy; at worst you are being scammed. A quit claim deed is marginally acceptable if the title company will insure it and the property description is accurate, but why settle for that when a warranty deed was agreed to? I could give you a quit claim deed to the Brooklyn Bridge, all totally legal and accurate, but it wouldn't be worth much...
Chris
[ Edited by ypochris on Date 08/05/2008 ]
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rubyarias
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Posted: 15:13 on 08-05-2008
The title agent refuses to send a Warranty Deed because the Quit Claim Deed has been issued to the county. I think the county is going to reject it because the APN is incorrect. The legal description on the Quit Claim Deed says lot 79 but no dimensions. On the county website it states what the lot size is. Will county record based on legal description even if the Parcel number is wrong? Is it ok that the lot dimensions are not on the legal description?
He also says, "Again, the title report was ordered and paid for by the seller - the owners policy of title insurance, if one is purchased, makes that irrelevant if WE'RE INSURING THE TITLE!"
This is what he says for the taxes, "Michigan property taxes, as explained in my letter are typically collected annually, in two general types: Summer tax (due August 31st annually) and Winter tax (due January 15th annually). Right now, Summer 2008 taxes are due August 31, 2008. The purchase contract signed by the seller, ( )and buyer,( ) , indicates that the tax proration is to be paid by buyer. So, when taxes are due, they're to be paid by the buyer."
I believe proration has nothing to do with when they are due rather estimate what I would pay from the start of ownership until the tax period ends. Am I wrong and I'm liable to pay full amount because I'm the owner one month before due date?
The Cash Purchase money was not put into an escrow account. READERS: I HAVE LEARNED NOT TO EVER DO THIS AGAIN. I DO NOT RECOMMEND. PAY THE EXTRA MONEY, IT'S WORTH IT.
He says they are not working as an escrow agent and that there is no lender and bank involved.
Is it too late to get another title agency and submit a correct Warranty Deed?
Question: Who would make the Seller pay property taxes up until his ownership ends?
I feel like I'm being scammed, seriously.
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ypochris
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Posted: 15:45 on 08-05-2008
It is hard to say what exactly you have agreed to as we cannot see the contract; the GLAR uniform buy/sell agreement (mid Michigan) states seller will pay taxes from first of year to closing date, with no opportunity to modify the clause except in "Other Provisions" at the end. Prorated taxes generally means taxes accrued during the time each party owns the property; unless it specifically states that the buyer will pay the seller's portion of the prorated taxes a reasonable person would assume that the buyer agreed to pay the buyer's portion of the prorated taxes. In the GLAR contract the language in unequivicable but I have no idea what you actually agreed to.
However, you state you agreed to a warranty deed, and there is no basis for substituting a quit claim deed even if it is called a general warranty deed in California and a warranty deed in Michigan- the intent is clear, and a quit claim deed is an entirely different animal. I think you can reasonably argue that the contract was breached by this substitution, and regardless of what they sent to the county (lame excuse- "I've already done it so I won't change it") insist that they send you the agreed upon warranty deed or your money back.
I do think some legal advice might be called for in this case- the problem is we are just guessing as we have no way of seeing the contract. Often a letter from an attorney will quickly resolve all issues.
Final note- results of title search are unimportant as long as they are in fact insuring the title- but you say you did not get title insurance in your package?
Chris
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rubyarias
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Posted: 16:50 on 08-05-2008
Ypochris,
The contract says:
Buyer will pay: Transfer Tax , Prorate Tax , Title Insurance Policy (If Buyer Wants).
Seller will pay: Title Insurance Policy , Seller will pay for the Seller's Attorney fee.
I wish I could get my money back. The contract was signed over four months ago and just now deeds are being signed. Throughout the four months I have triying to get out of this but have been unsuccessfully.
The title co is aking me to send a check for title insurance. I honestly don't want to send money to these people that might be scamming me. Can I pay Insurance Company directly?
With this whole prorate issue it seems that this agent doesn't know what he is doing. I requested for him to forward my file to his supervisor/owner. I'm waiting on a call from him. If he tells me the same thing I will get a lawyer because there is no way for a Quit Claim Deed to make sense to anyone-unless of course I'm being scammed.
[ Edited by rubyarias on Date 08/05/2008 ]
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ypochris
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Posted: 17:18 on 08-05-2008
Demand the eleven months of taxes and a warranty deed. Remember that there are winter taxes here too, and you should be paid the seven months of winter taxes also. Otherwise you want your money back, or there will be legal action. Having an attorney review the contract and send the letter would increase your chances of getting what you want.
Curious- where is the house located?
Chris
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rubyarias
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Posted: 18:09 on 08-05-2008
The home is in Detroit.
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cjmazur
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Posted: 19:16 on 08-05-2008
warranty deed or (I think better) a grant deed and title insurance.
If you are new to investing you might want to get some legal help as there are odd aspects to your transaction.
Did they or you have any agent? You might check w/ them.
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ypochris
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Posted: 19:25 on 08-05-2008
Detroit is tricky- only has half the population it formerly did. Some areas great and appreciating rapidly, some abandoned, some war zones. Hope you have inside info or checked the area out first!
You can get houses cheaper than cars in Detroit, but I personally don't have the knowledge or guts to invest there. My main help was raised there and says we should go in together on a project, but I will take a pass on that one. Don't even have a desire to visit- never made it closer than the airport...
Chris
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rubyarias
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Posted: 22:40 on 08-05-2008
Chris,
When I purchased the property 4 months ago I began advertising online. Since then I have had 600 online views on the property. I have received about 70 phone calls. From the 70 calls only about 4 people claim to have jobs. And all the others- I don't know what they do.
It's funny how people want to rent without working.
If you were to look into investing in the Detroit area. I' wouldn't say to walk away-I'd say RUN-RUN AS FAST AS YOU CAN.
Although the home location isn't that bad. It is located bordering Grosse Point. I think Detroit people who have jobs already own homes.
Thanks for all your help.
Ruby
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rubyarias
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Posted: 17:58 on 08-06-2008
[ Edited by rubyarias on Date 08/26/2008 ]
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smithj2
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Posted: 20:28 on 11-07-2008
When I close on a home, I ask all questions under the sun before signing anything. A number of closing agents have accused me of being a pain but I always tell them that after I sign on the dotted line, I am committed to the deal. I only have the power BEFORE I sign.
Now, with your situation, it appears that you have already done the deal. Did you purchase Owners Title insurance? From everything that was said above, I am not clear if you did or not but I am assuming that you did not because of the responses you are getting from the Title company.
The quit claim deed is totally not acceptable. A quit claim only releases whatever interest the signor may or may not have in the stated property. It does not "warrant" anything. Tomorrow if a lien is discovered on the property, the seller can wash hands off entirely. However, a warranty deed is like a promise. The grantor is stating and promising that they are the true owner of the peoperty in question and that they are transferring it to the grantee and insuring against any claims. So if a disgruntled ex-spouse shows up, a quit claim deed is useless but a warranty deed will stand up better in court.
Also the fact that the parcel numbers are off is huge. The county will record the deed to the parcel number it shows on the document. They will assume it is correct as-is and they will not help you fight over whether this was the right number or not. It is the owners responsibility to make sure the parcel number is right.
I tuly hope you bought owners title insurance or you may be in the midst of a legal conundrum. In this case, I think I agree that the cost of an RE attorney wiould be well worth it to get this cleared up properly.
Godd Luck.
JS.
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