Please explain if buying forclosed property..quit claim deeds and special warranty deeds?

Question

Is it good to have a seller convey from one entity to another by a quit claim deed? and letting the buyer get title by special warranty deed? Is this common? I am told that the QCD is put on record prior to the recording of the special warranty deed? Is this insurable and common when purchasing a forclosed property? I am also to get an Owner's Title Policy at closing (paid for by seller). This property was purchased thru an agent who dealt with the other agent who is selling the property for the bank.

Answer 1

Quit Claim is the WEAKEST form of ownership known to real estate law.

If a seller cannot convey property to you via General Warranty Deed or a Special Warranty Deed...period...then DO NOT engage in that transaction.

You won't be able to get a title policy at all if it was given to you via a quit-claim b/c it's the wrong legal instrument for property transfer.

I think you've been scammed...I have never, ever heard of a bank doing anything but Special or General Warranty Deeds.

Answer 2

You need a lawyer representing you right away. I don't know who is giving you this information, but they are not looking out for your interest. This is a dangerous situation. Don't rely on the agents. They are not competent to give you legal advice about anything, but especially not about title matters, and the lawyers for the title company and bank looking out for the title company and the bank not you.

Title insurance does not cover everything. It only insures against recorded interests. Other title flaws [one example out of many possible is an adverse possession claim] are not covered. You need a general warranty deed. A "special warranty deed" from someone who has held title for only a few minutes during the closing is worth little more than a quit claim deed, because it only warrants as to title issues that were created during that brief period of ownership.