Legal Question in Real Estate Law in Texas
Quitclaim in TX
I have a relative who owns a home with her now deceased mother. The home is still encumbered by a mortgage, but she decided to leave the property to foreclosure and move into an assisted living facility. She has agreed to ''sign'' the home over to me, and only wants a small amount in return if I am able to sell it. I have subsequently brought the note current with the lender in anticipation of a sale. The home has no leins on it, and probate is not an issue regarding the deceased mother. Is a Quitclaim Deed advisable in this case given there is still a mortgage and a warranty deed is not possible? If so, after filing the Quitclaim, the mortgator is notified - will they accelerate the loan? I already have an investor, could the mortgator stop the sale? Does Quitclaim enable the title company to write the check to me at closing? If not, what document can I have the relative sign to do so? If none exists, what can I have her sign to ensure that I receive the balance of funds? Is a period certain Durable Power of Atty. advisable to handle this sale and banking affairs on her behalf to protect my interests?
2 Answers from Attorneys
Re: Quitclaim in TX
You should likely use an earnest money contract (with a recorded memorandum of same if you are concerned about clouds on the title between now and when you sell the house, though the lender might view such a recording as a sale triggering acceleration). Another question is how is the health of your relative you are buying from? Will she be able/competent to sign the papers when you sell the house? This is complicated enough that you need a lawyer to document the transaction accurately and clearly to make sure your relative or her heirs do not come back later and say you cheated her. Likely $1500-$2000 in legal fees.
Re: Quitclaim in TX
You need to use a General or Special Warranty Deed. Do not use a Quit Claim Deed since most title insurers will not guaranty title to the property with a Quit Claim Deed as the conveyance document. On the acceleration issue, as long as the loan is current, I have NEVER seen a lender accelerate a loan. That is not to say that they couldn't, but many investors take this risk daily since getting a new loan could be quite expensive. You will still need either a probate or affidavit of heirship to clear up her mother's interest, unless they co-owned under a survivorship deed.
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