Author Topic: Trust Deed vs General Warranty Deed (USA, NC)  (Read 966 times)

SwordGuy

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Trust Deed vs General Warranty Deed (USA, NC)
« on: October 23, 2016, 08:53:59 AM »
I'm looking at buying a property that's held by a trustee.  It will come with a trustee deed vs a general warranty deed.

AFAIK, there are no liens against the property other than current tax year and a mortgage, both of which would be taken care of at closing.

I would be buying the property for circa $100k, adding circa $150k in repairs, and then selling for circa $250k to $375k.

Three questions:

1) As I understand it, title insurance would only cover me for the price of the land purchase, or $100k.  Is that correct? 

So if title were compromised, I could be out the $150k for improvements.   Any chance on putting a workman's lien on the property to force a sale to collect?

2) Will not having a general warranty deed in my hand cause issues with someone getting a mortgage loan to buy it from me? 

3) Can I offer a general warranty deed? 
If so, and somehow the title is found to be messed up, what have I just put at risk?  And for how long?

Drifterrider

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Re: Trust Deed vs General Warranty Deed (USA, NC)
« Reply #1 on: October 24, 2016, 05:00:01 AM »
I'm looking at buying a property that's held by a trustee.  It will come with a trustee deed vs a general warranty deed.

AFAIK, there are no liens against the property other than current tax year and a mortgage, both of which would be taken care of at closing.

I would be buying the property for circa $100k, adding circa $150k in repairs, and then selling for circa $250k to $375k.

Three questions:

1) As I understand it, title insurance would only cover me for the price of the land purchase, or $100k.  Is that correct? 

So if title were compromised, I could be out the $150k for improvements.   Any chance on putting a workman's lien on the property to force a sale to collect?

2) Will not having a general warranty deed in my hand cause issues with someone getting a mortgage loan to buy it from me? 

3) Can I offer a general warranty deed? 
If so, and somehow the title is found to be messed up, what have I just put at risk?  And for how long?

Invest the money it will cost you to discuss this with your closing attorney.  Considering the recent flooding (and general changes in NC real estate law over the years)  it is worth the money.

Title insurance will cover the cost you spent buying the property; nothing else.