What Type of Deed Is a Trustee Deed?
Exactly what is a Trustee Deed? Or the kind of deed that you get after buying a property at foreclosure?
There are numerous concerns about how deeds pass to the purchaser at a foreclosure sale and how that deed might differ from a common deed that conveys title. It's important to understand that because the deed to your house is the legal instrument that conveys ownership, it likewise particularly specifies what exactly it is that you own.
To discuss this, let's start by looking at the warranty that a typical deed would provide:
A Statutory Warranty Deed is the deed that communicates ownership with the highest level of warranty and is the frequently used kind of conveyance. In specific state, a Statutory Warranty Deed warrants that the seller was the owner of the title and had the power to communicate the property. The title was devoid of all encumbrances (except as stated), and the seller would call for and safeguard the title as communicated to the grantee versus lawful claims against it by anyone.
At a non-judicial foreclosure sale, a Trustees Deed is made use of to convey title, and offers no guarantees like those in a statutory warranty deed at all. In other words the new owner has no guarantee that the title is without all encumbrances and will assume any encumbrances. This is crucial to know because it is your responsibility to investigate any liens or encumbrances against the property prior to you purchase it at auction.
The title to the property is not insured at the time of purchase. You must establish an excellent relationship with a property expert and or a title company that can pull a title credit report that will notify you of any encumbrances or problems that would impact the title. It likewise might be a smart idea to acquire title insurance prior to or directly after the sale from a title company that is equipped to provide that type of policy.
When you acquire at auction, the sale is as-is where-is. It comes with all of the liens and encumbrances that survive the repossession sale.
It is suggested that anybody obtains property or offering property through a repossession sale, talk to a lawyer concerning which kind of deed they need to be prepared.