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The house isn’t the only thing you must clean to flip a property

by | Oct 13, 2020 | Title Issues |

Buying distressed, poorly maintained, outdated or unwanted properties can be an opportunity for income. The process of rehabbing and reselling a property is also known as flipping a house, a common practice for modern investors.

If you intend to flip a house, the amount you feel comfortable paying for the property probably reflects the amount of work you will have to do in order to sell the house for a profit. While determining the cost of physical repairs and aesthetic projects is important, you may also have another aspect of the property to clean. The title may have blemishes or defects that you will need to take legal action to correct in order to maximize the profit on the home when you resell it.

Blemishes on the title can mean financial liability in the future

Problems with the title of a property can come in a number of different forms. For example, there might be another party with a potential claim due to an estate or a divorce. There could also be encumbrances on the property, such as mortgages, which need to either get paid or removed from title. Finally, there could be liens by private debt holders, such as contractors who did work on the house or even medical facilities that provided care to the previous owner.

Clearing away these liens will be necessary for you to successfully sell the home to someone else. A property with blemishes on its title may not qualify for standard title insurance and may therefore not qualify for mortgages, drastically limiting the pool of potential buyers for the property once you invest work in it.

Quiet title action can rehab the title like the rest of the house

Initiating quiet title proceedings will typically be the fastest way for you to address blemishes on a property’s title that could affect a future transfer. Quiet title proceedings give you the opportunity to have the courts correct outdated liens or other issues on the title of the property, thereby paving the way to a clear title.

Reviewing any title issues with an attorney familiar with Pennsylvania real estate transactions and laws is often a wise decision before you invest in a property to flip or once you realize there are title concerns.


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