I'm sure others have had this wonderful experience but for those of you who haven't I thought I would share mine. I listed a property a while back. Within two days I had a signed contract. Everything was going smooth. Until about two weeks before closing. I did not realize it but my seller's father's estate had quit claim deeded the property to her. Therefore, there was no need for a title policy at the transfer of the property. She of course thought everything was fine. My first mistake was I did not ask her for a copy of the non-existent title policy which might have clued me in a little. If I had known that there was no title policy I may have requested a preliminary search to try to identify potential problems. I did not however. So two weeks before close the title company informs me that there are two unsatisfied mortgages out there, one from her father and another for the people from whom her father had bought the property. The one from her father was easy. It was just a matter of my seller going to the bank and closing out the still open, zero balance, equity line on the property. The second one was not so easy! The bank through whom the original mortgage had been taken out was now defunct and had changed hands four times since the original transaction occurred. The title company we were using at the time could not tack down where the original mortgage papers had landed. On top of that, the title company that closed the deal between my seller's father and the people he bought the property from, had also gone under. The title company's response to this was "we can't find the bank, the title company or the parties involved. So your seller is going to have to wait until 2019 to sell the house", the time when the terms of the mortgage expire. Fortunately, my seller remembered the real estate company involved, contacted them and they had the hud statement from the closing to show that the mortgage had been paid off at closing. However, this was not sufficient for the title company to provide a policy WITHOUT exceptions. According to this title company she was still going to have to wait until 2019 to sell the property. Needless to say this was not acceptable to me or my seller. What I'm not telling you about is all the numerous calls, emails and contacts made in the process of this whole thing. What a headache for everyone involved!! Luckily the buyers were almost as intent on buying this property as me and my seller were on selling it to them! So we all continued to WORK TOGETHER. And I must add the selling agent forged forward with us all too! So to bring this to a close, we ended up contacting another title company that was convinced the mortgage had been paid off and were willing to provide a policy without exceptions. We closed a week late!! The moral of the story is "IF YOU EVER RUN ACROSS A SITUATION OF A QUIT CLAIM DEED WITHOUT A TITLE POLICY, INSIST ON A PRELIMINARY SEARCH, IMMEDIATELY TO AVOID A NIGHTMARE FOR EVERYONE!!"
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