News About Properties

Quitclaim deed OK, but title insurance needed

Sellers who are divorcing often use such a deed, but buyer needs to protect self with owner’s policy

Q: We are trying to buy a house from a couple involved in a nasty divorce. They each have “street fighter” divorce lawyers who use one tactic after another to delay the sale closing. Just when we get close to a closing date, it gets postponed. The latest tactic is we will get only two quitclaim deeds, one signed by the ex-wife and one signed by the ex-husband. Is this dangerous for us?

A: No. Quitclaim deeds are very common in divorce situations. Neither ex-spouse wants to make any warranties or representations as to the condition of the property title.

Your best protection is to obtain an owner’s title insurance policy from a reputable title insurance company. Read it very carefully to be certain there are no liens or encumbrances you weren’t expecting. It is perfectly safe to accept a quitclaim deed if you also receive an owner’s title insurance policy.

Sellers furious after buyers cancel deal, pocket deposit

DEAR BOB: We put our home up for sale in early October. Within a week, we signed a sales contract with buyers. Eight days later, the buyers backed out, stating they changed their minds. We opted to keep their $2,500 earnest money deposit. But we discovered the next day the real estate agent never received the $2,500 stated in the contract. We believe we are owed this money but have been advised to “forget it.” Who is at fault for not actually collecting the $2,500 and should we try to collect it? –Joy C.

DEAR JOY: Shame on that real estate agent. Unless the real estate agent told you the $2,500 earnest money deposit stated in the sales contract had not been received from the buyers and deposited in the agent’s trust account, that agent is clearly liable to you for the missing $2,500.

If she refuses to pay you the $2,500 promptly, take her to local Small Claims Court to obtain a judgment against her. There is no valid excuse for a real estate agent ever bringing you a purchase offer to accept and not informing you she hasn’t received the $2,500 earnest money deposit stated in the contract.