Cash Flow With Joe

A no-good deed goes unnoticed

by | May 16, 2016 | Newbie | 4 comments

A no-good deed goes unnoticed:


The deed room is a very important place to frequent, especially once you put a house under contract to buy. You need to make sure the people selling you their house can legally do so.




Your closing attorney will look at the chain of title for you, but this often occurs a day or two before your scheduled closing date. By running a preliminary title search, you can give them a heads up if something is awry.


If there’s a title flaw, it can delay your closing or possibly kill the deal. This is why it’s important for you to know your way around the deeds room; you should run title as soon as your offer is accepted.


We had a deal that we neglected to run title on ourselves. We got all the way to the closing table, and our attorney informed us of an issue- and boy was it an issue. The sellers didn’t legally own the property. As it turned out, they were more surprised at this news than we were.


I’d like to walk you through the story of what happened in this chain of title and identify the kind of deeds we should have been paying attention to. This will give you a grasp of what you need to be looking for when you run a title.


The story goes like this:


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A man bought an acre of land using a private mortgage to buy the property. A mom and son bought that property from the man leaving that mortgage in place. Later on, the son decided he didn’t want anything to do with the property. So he quit claimed his interest to his mother.


Here’s where things get a little confounded:

The mom decided to subdivide her acre and sale half of it. The new owner sold the half acre again to someone else with a faulty contract. The faulty contract holder then quit claimed their interest back to the son because the son decided he’d like to own the property again.


And for the grand finale:

The mom passed away with no will. Because of that, the half acre she retained was sent to probate and left to her five heirs.


So we had five people who had claim to half an acre and no idea who owned the other half. Needless to say, our sellers didn’t have a clear title.


Let’s go back through the story and identify the deed types in this chain of title.


Most of the time when someone buys a property, the seller gives the buyer a warranty deed. This type of deed states who the current owner is. The original buyer in this story received a warranty deed when he purchased the property. He also gave the mom and son a warranty deed when he sold the property to them.


Next is the security deed. Security deeds name the people or institutions that have a lien against a property. In this case, the original buyer had a private mortgage on the property. The security deed let everyone know that a mortgage still needed to be paid off, and it protected the individual that held the private mortgage.


Lastly we see some quit claim deeds. The son gave one to his mom and eventually the faulty contract holder gave one to the son. This kind of deed states you’re relinquishing any rights to the property that you may have had to the person receiving said deed. So the son gave his rights to his mom, and the faulty contract holder gave their rights to the son.


Because we didn’t run title, it delayed closing for more than two months. We had to do something very creative to get this closed with a clear title. Want to know how we did it? Ask me at



Joe and Ashley English invest in real estate in Northwest Georgia. For more information or to ask a question, go to





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