Real Estate

What Should I Do After I Purchase a Property at a Tax Sale in Missouri?

August 25, 2023 by Marc Jacob Leave a Comment

As you now know firsthand, obtaining a property through a tax sale can be an exhilarating experience for investors, especially if the property was acquired at a favorable price. However, the journey doesn’t end once the auction is concluded. There’s a slew of important steps to follow to ensure a smooth transition and to maximize the potential of your new asset. Let’s delve into what to do after you’ve secured a property via tax sale.

Understand Your Right of Possession

First and foremost, understand when you can take possession of the property. In Missouri, there is a 1-year redemption period for properties sold for either the first or second time at tax sale. There is a 90-day redemption period for properties sold at a third tax sale (or later). This redemption period begins once you have provided the necessary notices to the original owner. During this period, the original owner can repay the owed taxes plus interest on the amount of tax owed and reclaim their property. To learn more about the redemption process and obtaining a deed for the property in order to have a right of possession, please read one of our previous blogs by clicking here.

Secure and Inspect the Property

Once the redemption period has expired and the deed granting you possession has been recorded, your next step should be securing the property. Change the locks, secure any broken windows or doors, and, if necessary, set up a security system. After securing, conduct a thorough inspection. This will help you identify any issues, like structural damages or pest infestations, that might need immediate attention. Consider bringing a trusted contractor with you during this visit. You can either bring one who will come for free in exchange for a hope that they will get the job making the repairs, or you can pay for one to come give you an independent assessment and then bid out the work.

Address Legal Matters

Quiet the Title: In many cases, properties obtained via tax sales come with ‘clouded’ titles due to potential liens or claims. You might need to initiate a ‘quiet title’ action in court to clear any ambiguities and confirm your clear ownership. The County makes no warranty of title in the deed it issues to you, so even clearing the name of the owner who lost the property to the County in the tax sale often needs to be handled with Quiet Title Suit.
Unlawful Detainer: If the property is still occupied by the former owner or tenants, or by squatters, you might need to initiate an unlawful detainer proceeding. Always follow the legal process and consider consulting with an attorney to ensure you’re compliant with local regulations.

Assess the Financial Implications

Understand the ongoing costs associated with the property:
Property Taxes: Make sure all future property taxes are paid on time to avoid finding yourself on the other side of a tax sale.
Insurance: Ensure the property is adequately insured. Ideally, arrange for home owners insurance to take effect on the date the deed is issued to you by the County.
Maintenance and Repair Costs: Budget for any immediate and long-term repairs, as well as ongoing operating expenses and assuming a reasonable vacancy rate.

Plan for the Property’s Future

Decide on the primary purpose of the property:
Immediate Resale: If the local real estate market is thriving, you might consider selling the property immediately – potentially to another investor who is interested in flipping the property.
Renting Out: If you’re eyeing a steady stream of passive income, turning the property into a rental might be the right move.
Renovations and Flipping: For those with a knack for renovations, the property can be transformed and then sold at a higher price.

In conclusion, obtaining a property through a tax sale is only the beginning. The subsequent steps, from ensuring legal clarity to deciding on the property’s purpose, are equally crucial in making the acquisition a successful venture. By following the outlined post-acquisition steps and continually educating yourself on real estate dynamics, you can transform your tax sale purchase into a profitable investment. Always consider seeking advice from professionals, such as real estate attorneys, real estate agents, and financial advisors to navigate any complexities. Remember also, that every county has a somewhat different process and timeline for tax sales, though they do all need to comply with state statutes.

If you are considering or already have purchased a property at a County Tax Sale, City Tax Sale, Trustee’s Sale or Sheriff’s Sale, or otherwise have a title issue we might be able to clear up with a Quiet Title action, please reach out to us and take advantage of the flat fee pricing we can usually offer in this area. Contact us today by clicking here, or by calling us directly at 314.862.2237 and letting us know you need a Quiet Title Lawsuit or want to discuss Purchasing Tax Sale Property.

What are the Five Most Common Questions We Get Asked About Quiet Title Suits?

August 8, 2023 by Marc Jacob Leave a Comment

What are the Five Most Common Questions We Get Asked About Quiet Title Suits?

We know that navigating through the labyrinth of real estate law can be a difficult process, especially when the notion of “quiet title suits” enters the fray. But have no fear! These lawsuits are designed to solve property disputes, lingering questions about ownership, and to ensure clear and marketable title.

This blog post will dissect five of the most common questions about quiet title suits, facilitating a smoother and more confident navigation through the intricate waters of real estate law.

What is a Quiet Title Suit?

Think of a quiet title action as a method to resolve who owns a piece of property. This helps eliminate any “noise” or disputes, metaphorically “quieting” them.

A quiet title suit, or action to quiet title, is a lawsuit to settle and establish one party’s title to real property against anyone and everyone, and thus “quiet” any challenges or claims to the title. The action seeks to remove questions regarding the ownership of title (“clouds”), thereby ensuring a clear ownership for the individual or company filing the quiet title suit.

When Should You File a Quiet Title Suit?

Quiet title actions are generally filed when there are disputes or uncertainties over a property’s title. Such circumstances can arise when a property passes from one individual to another (e.g., following a death, a sale, or a foreclosure), disputes over boundary lines, ambiguities in a property’s title history, or even if there’s a suspected error in the property’s paperwork on file with the recorder of deeds in that county.

These suits are also beneficial when dealing with properties purchased at a tax sale. In these cases, the buyer may need to file a quiet title action to eliminate any other possible interest holders in the property (for example, the previous owner who failed to pay property taxes). This should make the property’s title marketable and insurable, increasing the property’s value and making it easier to sell or finance the property in the future.

How Does a Quiet Title Action Work?

The process for a quiet title action involves three basic steps. First, the person seeking clear title must file a petition or complaint in the appropriate court. This should identify the property in question and any potential adverse claimants. Prior to filing, your attorney will want to see a title report or informational title commitment to understand how the title insurance market views the current state of title, and s/he will also want to know from you the names and addresses (if you have them) of any potentially adverse claimants.

Second, once the lawsuit is filed, the potential adverse claimants must be notified. If they fail to respond within the specified time frame, the court may issue a default judgment, thereby granting clear title to the claimant. This is the most popular outcome when it comes to properties obtained via tax sale.

Third, if the defendants do respond, the case may proceed to trial where the claimant will need to prove their superior right to the title. If successful, the court will issue a judgment to quiet title, effectively confirming the claimant as the rightful owner and silencing other claims.

How Long Does a Quiet Title Action Take?

The duration of a quiet title action can greatly vary depending on numerous factors, such as the complexity of the case, the court’s calendar, and whether the defendants choose to contest the lawsuit. Typically, if there’s no opposition, a quiet title action will take somewhere between 3 and 6 months to complete. However, if the action is contested, it could take well over a year. It’s crucial to consult with a real estate attorney to understand the expected timeline for your individual situation.

Does a Quiet Title Suit Remove All Liens and Claims?

The quiet title action will resolve all known claims against the property. However, it is important to note that the judgment only addresses issues raised in the action. If there were undisclosed liens or claims at the time of the suit, or if there were claimants that you knew or should have known about who were not notified about the suit, they may still impact the property post-judgment. This is why title searches and title insurance are significant components of the property buying process, ensuring potential claims or liens are discovered and addressed.

A quiet title suit is a robust tool for establishing clear ownership and resolving disputes. The process is a complex one but we are happy to guide you through it.

If you are considering or already have purchased a property at a County Tax Sale, City Tax Sale, Trustee’s Sale or Sheriff’s Sale, or otherwise have a title issue we might be able to clear up with a Quiet Title action, please reach out to us and take advantage of the flat fee pricing we can usually offer in this area. Contact us today by clicking here, or by calling us directly at 314.862.2237 and letting us know you need a Quiet Title Lawsuit or want to discuss Purchasing Tax Sale Property.

GUEST BLOGGER: Retirees Looking To Homestead Can Use These Tips For Buying A Property

January 17, 2022 by Marc Jacob Leave a Comment

While many seniors choose to downsize after retirement, others are eager to find a way to sustain their families by making use of more land. Homesteading is a great way to save money, get involved in a useful, sustainable hobby, and spend more time with your loved ones, but it typically requires some space to spread out. If you’re interested in homesteading, think about the specific activities you’d like to pursue — such as farming, making textiles or decor to sell, or creating room for your family members to live or visit — to get an idea of the sort of property you’ll need to look for. Here are a few things that you should keep in mind when you’re ready to think about a post-retirement move. Be sure to discuss local subdivision, HOA, licensing or zoning restrictions with your attorney at Home Sweet Legal ^® or The Jacob Law Firm, LLC prior to proceeding.

Get pre-approved

Because homesteading usually requires a bigger property, most people go with a mortgage that will help make the purchase more affordable. There are several different kinds, however, so it’s essential to think about the best one for your specific needs. If you have good credit, a conventional loan might be the best option, but there are also VA loans and FHA loans, which are federally backed and are helpful for those who have lower credit scores. These typically require more money down — up to 10 percent of the total cost — so it’s best to explore all your options to get the best deal. Download a credit monitoring app that will help you stay on top of your score; some even have built-in score boosters that consolidate the bills and loans you’ve paid on time and factor them in. Start your application for a mortgage and get pre-approved so you’ll have peace of mind.

Plan for your family’s needs

When your funding is taken care of, think about what type of property you want. Homesteading requires some careful planning, so consider what your family’s needs are now and what they might be down the road. Farming and keeping animals will necessitate quite a bit of land, of course, but you might also want to build a guest house, detached garage, or workshop. Do some research on the types of permits you’ll need to build; these vary by state, and sometimes county by county and locality by locality, and may come with hefty fines if they aren’t obtained in a timely manner. Keep in mind that some states offer free land for homesteading, which is dependent upon a few factors and an application process.

Often, it takes a little imagination to picture what can be done with a house, so keep an open mind when looking at different properties. You may be able to turn an unused space — such as a sun porch or shed — into a functioning area.

Consider the possibilities

Homesteading comes with a lot to consider, including how you’ll utilize the space. Generally, the act of homesteading includes living off the land or making good use of the property for growing food, creating furniture, clothing, or other useful items, and/or making room for extended family to live or visit. However, you can turn homesteading into a business as well and make a successful living while working from the comfort of your own home. Just remember, as we mentioned above, local licensing or other restrictions on the property should be evaluated by your attorney prior to submitting a purchase contract. Woodworking, growing and making various foods and baked goods, and sewing clothing items are all great ways to get started. You might check out the local farmer’s market to see about getting a booth or consider setting up an e-commerce website. Just be sure you take the necessary steps to legitimize your business. For example, you’ll want your attorney at Home Sweet Legal ^® or The Jacob Law Firm, LLC to set up your Missouri or Illinois LLC or other business type to make sure it gets done right. Doing so has several benefits, including allowing you to set up a business bank account and helping you protect your personal assets from any business debts you incur.

Expanding your home after retirement is a great way to live independently and take care of your family while leaving a legacy. Think about how to make the most of your property and how to sustain your lifestyle by monetizing it where possible.

Guest Blogger: George Miller – George believes one of the keys to well-being is security. Whether you’re securing your home, preventing fraud, protecting your online presence, or securing your finances, it’s important to take practical but often-overlooked safety measures, which is why he created Securabilities. In his free time, you can probably catch George at an Atlanta Braves game with his family or tinkering with his latest home DIY project.

Photo via Pexels

If you are buying or selling a home, or if you have a Real Estate or Business Law matter and would like to discuss it in greater detail, we can be reached at 314.862.2237 or just fill out our contact form by clicking here.

Why Should My Lawyer Review the Home Inspection?

October 27, 2015 by Marc Jacob

A Buyer should show their private home inspection report to their lawyer, so that the lawyer can properly write an inspection notice to protect the Buyer’s interest.

Your Lawyer Can Review the Inspection Notice

When buying a home, an important part of the due diligence process is getting a private home inspection. This inspection helps the Buyer better understand the current state of the house they wish to purchase.

A private home inspector walks through the home, does a visual inspection, takes pictures of things that appear dangerous, are deteriorating, or might not up to code. They also test the various systems in the home, such as electrical, gas, heating and cooling, and sometimes the kitchen appliances. An inspector can go up on the roof, look at the brickwork and determine what type of shingle, siding and tile has been used on the house.

Most contracts allow for an “Inspection Period,” during which Buyers can request repairs or otherwise object to the condition of the house. During this time, the Seller has an opportunity to fix the problems cited by the Buyer.

In many St. Louis home sales, the Buyer provides the Seller with an Inspection Notice during the Inspection Period. The Inspection Notice details what repairs or replacements Buyer wants made prior to closing.

It is very important for the Inspection Notice to be properly drafted and sufficiently detailed to avoid confusion between the Buyer and the Seller and to be enforceable in a court of law, if necessary. For these reasons, Buyers should consider showing their private inspection report to their attorney before finalizing the notice.

At the very least, Buyer will want to show their attorney the language Buyer or their agent wrote, in order to sharpen the language for Buyer’s benefit.

Your attorney will likely have dealt with many inspection situations in the past and is trained to write the notice in a manner that will make it most likely to be enforceable.

If you have questions about your private inspection report or would like to discuss your situation, please contact us at 314.862.2237 or at mjacob@marcjacobesq.com

Who are all of the People Involved in a Home Purchase?

October 20, 2015 by Marc Jacob

There are many people and companies involved in a home purchase. Some of the familiar ones are the:

Buyer
Seller
Lender
Buyer’s and Seller’s Agents
Buyer’s and Seller’s Lawyers

In addition, there are a number of parties that the home buyer may be less familiar with, such as:

Private home inspector
Specialized inspectors, for:
- Termites
- Radon
- Lead-based paint
- Sewer-lateral line
- Roof
- Plumbing
- Electrical
- Gas-lines
Municipal or County Inspectors
Fire District Inspectors
Appraiser
Title-company
Surveyor

Each of these plays a unique role in the home buying process and these lists are not meant to be exhaustive. We find that having trained experts involved in the process minimizes the inherent risks of purchasing real estate

To learn more about types of inspections available, please read this post.Or, To find out how to find a private home inspector, please see this previous post.

If you are in the home buying process, please contact us at 314-862-2237 or at mjacob@marcjacobesq.com

Should I Get a Lead Based Paint Inspection?

October 13, 2015 by Marc Jacob

Federal law requires Sellers of older homes (those built before 1978) to disclose whether they have any information about the existence of lead-based paint. That is why Buyers are generally given a “Lead Based Paint Disclosure” from the Seller or the Seller’s agent.

Lead-based paint can be dangerous to your family

To learn more about the dangers of lead-based paint, the Environmental Protection Agency has published a pamphlet available here:

Lead based paint can be harmful to young children, infants and fetuses. It can enter your body in multiple ways. Each family should therefore be aware of its danger and should take it seriously. Whether or not you decide to get your own lead-based inspector is up to you and may be very fact specific to your situation.

In our practice, we do not see many Buyers get lead-based inspections, even for homes built prior to 1978. This may be because they are unaware of the existence of lead-based paint, or because they plan to repaint the home. Whether or not repainting protects against lead-based paint should be investigated prior to making the decision on an inspection.

If you have questions about lead-based inspections, please contact us at 314.862.2237 or at mjacob@marcjacobesq.com

What is the Difference Between a Pre-Qualification and a Pre-Approval?

September 16, 2015 by Marc Jacob

For Buyers who need financing to purchase a home, the home purchase contract may give them some time to get a “Loan Commitment” or “Loan Approval.” The Buyer must get either of these before the Loan Contingency Deadline.

In addition to these terms, there are other terms that often get thrown into the mix, and that are helpful to understand. There is some variation across lenders, and the definitions below may not fit all lenders.

Pre-qualification means that the lender evaluated the potential borrower’s financial picture based only on information the borrower provided, and indicated the mortgage amount for which the borrower could possibly qualify. The lender has not reviewed the potential borrower’s credit, or any other supporting documentation.

Pre-approval is a different term and is somewhat more involved. To get pre-approval, the lender verified the potential borrower’s financial background, checked their credit, and reviewed the mortgage application and other supporting documentation. If pre-approved, the lender can provide the potential interest rate that the borrower would qualify for and may also allow them to pre-lock a rate.

Although a borrower may get a “Pre-qualification” or a “Pre-approval,” it is the Loan Approval or Commitment that are really the important benchmarks when it comes to the loan contingency deadline.

A borrower will therefore want to discuss with their lender what is required to get documentation that assures that the lender will provide financing.

A lender may not want to discuss appraisals or final underwriting until it gets closer to closing. This can be an area of contention between the borrower and the lender. If the lender has not finished underwriting, but has issued the approval or commitment, the borrower may be on the hook to purchase the house even when the bank is not yet fully committed to funding.

For this reason, we suggest that borrowers discuss the issue with an attorney if their lender is not willing or able to give them a satisfactory commitment or approval.

If you have questions about obtain a loan commitment or approval, please contact us at mjacob@marcjacobesq.com or at 314.862.2237

What is the Difference Between a Loan Commitment and a Loan Approval?

September 8, 2015 by Marc Jacob

Many home purchase contracts today will give the Buyer a certain amount of time to get a “Loan Commitment” or “Loan Approval,” if the Buyer seeks financing to purchase a home. The Buyer must get either the Loan Commitment or Approval by the Loan Contingency Deadline.

What is needed from the lender before the deadline? — What is needed from the lender before the loan contingency deadline?

The terms “Loan Commitment” and “Loan Approval,” are often used to mean the same thing in some standard real estate contracts and even in a number of court cases. One could argue that a loan commitment is stronger than a loan approval, or vice versa, but we have not yet seen any clear distinction in Missouri.

Although the lender may offer you a “Pre-qualification” or a “Pre-approval,” the Loan Approval or Commitment are really the important benchmarks when it comes to the loan contingency deadline.

A borrower will therefore want to discuss with their lender what is required of them to get a document from the lender that assures them the lender will provide financing.

Often lenders do not want to discuss appraisals and final underwriting until it gets closer to closing. This can be an area of contention between the borrower and the lender. If the lender has not finished underwriting, but has issued the approval or commitment, the borrower may be on the hook to purchase the house even when the bank is not yet fully committed to funding.

For more information on what happens if the lender does not commit to funding, read this.

For this reason, we suggest that borrowers discuss the issue with an attorney if their lender is not willing or able to give them a satisfactory commitment or approval, or if they want some help navigating this process.

If you have questions about obtain a loan commitment or approval, please contact us at mjacob@marcjacobesq.com or at 314.862.2237

What Documents Should I Review Before Coming to a Home Closing?

August 25, 2015 by Marc Jacob

Anytime you are preparing to enter into a major financial transaction, it is wise to review the underlying contracts and other documents. In a home closing, those documents might include:

The Sales Contract,
Amendments to the Contract,
Inspection Notice,
Final Walk-through Notice, and
Any other documents that require either of the parties to provide something at or prior to closing, such as additional funds, certificates or other documentation.

In our experience, some of the things that often get overlooked are:

Whether Seller is required to provide a home warranty;
Whether Seller is required to provide lien waivers, due to repairs at Buyer’s request;
Whether Seller is required to provide a passing gas inspection;
Whether Seller is required to provide a passing local government or fire district inspection;
Whether Buyer or Seller needs to provide a Certificate of Trust, if they are acting in a Trustee capacity.

If you have an attorney, he or she will likely review these documents prior to closing. In addition, both you and your attorney should review the HUD-1 Closing statement and other closing documents provided by the title company and lender. Read this post for more information on closing documents.

Properly preparing for closing in our experience leads to a much smoother closing of the transaction.

If you have questions about your documents, please contact us at 314.862.2237 or at mjacob@marcjacobesq.com

Don’t Real Estate Purchases Just Use Standard Form Contracts?

August 18, 2015 by Marc Jacob

A “standard form contract” is really just a contract like any other. It is drafted for the benefit of the client who hired the lawyer to draft the contract. Buyers and Sellers should therefore be very concerned that the terms in the contract were not written for their benefit.

For example, most of standard form residential contracts we see are drafted for a local, private, association of real estate brokers and agents. The lawyer(s) who drafted those contracts did so on behalf of that association to help its members facilitate home sales in the most efficient manner possible. The drafting lawyers may not have been not very interested in giving the Buyer (or Seller) the protections that Buyer (or Seller) would want to have in a fully negotiated agreement.

This leaves Buyers and Sellers in danger. They often think they are protected because a contract is called “standard” and many people use it. But without modifications to that contract based on the specifics of their deal, the protections Buyers and Sellers want are probably not in that “standard” contract.

If you would like our office to review your contract or draft a custom one, please contact us at 314.862.2237 or email at mjacob@marcjacobesq.com