Here is a question from one of my clients about buying a house with a kitchen table closure. My quick answer… Watch out!

Q: Hi Lou, I have a contracted property that I want to resell/trade in as is to a rehabber/renovator, but I may need to buy it quickly and simply file the Quit Deed, without using a closing attorney or waiting. for a title exam. I need your advice.

The seller just called me and left me a voicemail saying he didn’t want to sell me because he got a better offer. Now I have it under contract, with a purchase and sale agreement signed by her, and I also had her sign a deed of resignation. I did it because she was fighting with her sister over ownership of this property, which was given to her by her mother, who passed away 2 years ago. The deed is in her name only, not her sister, mother or anyone else. I saw the deed and made a copy of it.

I thought I should get the Quit Claim Deed (QCD), in case I had to register it due to family issues. The seller also agreed. She said that she just wanted to get rid of this property. I also filed an Affidavit of the property with the court showing that I had it under contract, as you recommend. I am in the process of having my title company do a title check.

Now what do you recommend me to do? Should I go back to court and file the QCD or wait until the title search is complete to file the deed? or should I leave, or should I choose to wait and schedule an attorney to do the closing?

thanks, g

A: Hi G., what you are describing is a bit risky, however it is done quite often, commonly referred to as “kitchen table closing” as they are often literally closed on the Seller’s kitchen. It is a VERY good idea to do a title examination first, before doing a “kitchen table closing”, especially if you are giving the seller money.

Normally I wouldn’t recommend doing your own closing, but since you’re rushing your purchase so you can “preserve” your deal before the other Buyer moves in and buys it, and/or before the sister does something rash… Just make sure that the transaction was in advance and that you really intend to move forward as agreed. I think I would go ahead and file/record the QCD. I don’t see that you have anything to lose, and everything to gain.

You would then tell the seller that they can’t sell to anyone else because they already have a binding agreement to sell to you and that you already “technically” own the home (since you registered the QCD). Let her know that your plan is to review the title and, as long as everything is in order, you will proceed with a regular closing in which she will receive any proceeds owed to her.

If there is a problem with the title that prevents the sale of the house, he will simply return the property to her, after which she can sell it to whoever she wants.

It was great that you already filed your “Affidavit of Contract” which means you have a valid Purchase and Sale Agreement (PSA). If the seller attempts to sell to another buyer before he files the QCD, the affidavit he filed will protect his interest and allow him to purchase the home in the future.

By filing the QCD, you become the official owner of the property. No one can take away your deal. Since you’re buying it “subject to” any loans, you’ll need to start making payments on any loans (call lenders for a “statement” to make sure there are no surprise late payments or penalties you’re buying). re “inherit”). I’m assuming you gave him no/little capital/cash at this point, so he has no funds invested, or at risk with the seller. You now have time to evaluate all of your finances and make an informed decision. If you don’t want it in the end, you can always stop claiming the property back to the current owner, as you were told above.

**Note to all my fellow investors: You don’t even want to play this “close the kitchen table” game, unless you have a strong indication that it’s a good deal and you’re 90% sure you’re going to go. all the way with this deal. Taking the property via a quick recording of a QCD, and then returning the property to the original seller with another QCD later when you have “had the chance” to do your due diligence, is not a practice you should engage in on a regular basis. We only discussed it in this example, because the investor is trying to rush to protect his good offer so that the seller does not fraudulently “sell it back” to another buyer.

You should always use a reputable attorney or title company to close your deals, even when buying “subject to” the mortgage to ensure there are no additional liens on that property that you are not aware of. By closing with a proper closing agent, you will also be able to purchase title insurance to protect your investment in the property.

If a title problem were to arise without a current title insurance policy, you would be financially responsible for the cost of paying any additional liens and/or all legal fees to resolve the problem before you can resell the property. Unless you are willing to literally gamble with what can be tens or hundreds of thousands of dollars, close with a reputable closing agent and do not attempt a kitchen table closing.