I bought a small Commercial Lot in May and closed at a title Company. My sale was bundled in with the Seller’s purchase of a large parcel. I got a single lot from his large parcel of eight lots. He’s getting six of those lots replatted as residential and had two commercial lots left.
I asked about any unpaid taxes when I closed. The Title Company said there were unpaid taxes and they were paid prior to closing. I did get Title Insurance.
Round 2.
Same Seller offered me a very good price for the remaining commercial lot. It is beside the lot I previously bought. Both lots are directly beside an existing strip mall. They can’t be changed to residential use.
I agreed to the price if he paid my closing fees. It’s a cash sale with cashier’s check. Just like before.
Today he sent me a Warranty Deed and wants to meet at a notary. There is a documentary tax statement declaring “Documentary Stamps in the legally correct amount, has been placed on this instrument”.
But, how does Title transfer? Do I have to go somewhere to file paperwork?
Should I insist on closing through a Title Company? I’m concerned the seller will balk at the cost.
I have limited experience with real estate. I’ve always used a Realtor. The purchase in May is the first time I dealt directly with the seller. He had listed the lot himself in the local paper.
The “$10 and other good and valuable consideration” is a legalism; that is, in order for the transfer of land to be valid, it must be exachanged for something else of value. So, it says a nominal amount of money, but includes “other consideration [i.e. things of value]” to allow for the possibility that you got more than just $10.
In theory, it’s to keep the actual purchase price private. In practice, the county will report the purchase price.
That is, they will do so when you record the deed. Which you should. While the deed may be valid as an agreement between the two of you, you also want to put the rest of the world on notice that you now own the land (i.e. for purposes of getting notices, or for establishing your priority vis a vis creditors of the prior owner). That will cost you a filing fee, and you will need to pay taxes based on the actual purchase price (usually called documentary stamps).
As for why a “warranty” deed? That’s a good thing. The seller is not just conveying the land, but also a promise to defend your rights against anybody else claiming a better ownership interest. This is opposed to a “quit claim deed”, where he is just giving you what he has (i.e. he’s “quitting” his “claim” to it), with no assurances that what he has is valid title, above and beyond anybody else.
[Note: Much like you want to put the notice of your purchase by recording the deed, you are on ‘constructive’ notice of any liens or ownership rights previously recorded. So you want to see if any taxes are owed, or mortgages held, or other owners identified, before you shell out the money. That’s what the title insurance you usually purchase is for. You may be confident that title is clear, but paying a title company just for a title search is not a bad idea. At the least, look up the public records tagged to the property on your own. Lots of people flip property several times over the course of just a few days, or even hours].
I’m going to do a Title search on the land. It’s available online at my county clerk’s office (web site).
I found the boilerplate form the seller used. But, I think I’ll get him to use the one available from deeds.com. They have forms specific to each state and county. They just updated the Warranty Deed form a couple weeks ago. It’s $20 but that should ensure that the form will be accepted at the recorder’s office.
I downloaded a PDF listing form requirements from my recorders office. Typical government. They specify margins and they want an area they can fill in. $20 to get the right form makes sense.
I looked up the land at the county clerk’s web site. I see where the seller bought lots 7, 8, and 9. I also see a warranty deed for my purchase of lot 9 in May. The Title Company’s name is on it.
Lot 7 is a huge lot that he’s replatted for six residential lots. That’s where he plans to make his money. This land is on the very edge of an old residential neighborhood.
Still got to check for any liens. But at least I know this guy owns the land he’s selling.