I invest in Colorado Tax Liens and sometimes end up owning the underlying property. I received an postcard from Meridian Title about their tax sale certification process. Googling Meridian Title and Tax Sale Certification I couldn't find anything that endorsed the process or said it was a scam so I was skeptical. However, I had about 8 properties in Grand County Colorado so I called for more information and figured I'd try them. Following is my experience.
For background, if you get a Treasurer's Deed to land in Colorado, there are generally four ways to sell the land. First, you can sell the land by giving a buyer a quit claim deed or a bargain/sale deed on the land. You can generally do this if you are selling to a neighbor or someone else that has an interest in the land and with a low sales price. However, since this isn't a warranty deed, you might not get full price and since you can't offer title insurance, the buyer can't get financing. I've done this a few times but always to a neighbor or someone who is trying to fix a defect in their own property.
The second way is to wait nine years (in Colorado) at which point the Treasurer's Deed becomes "marketable" and you can do a Warranty Deed and offer title insurance on the property. If the property is low value with low carrying costs (taxes, HOA fees, etc.) I'll just wait the nine years and then sell on craigslist or through a broker. Unfortunately for the land in Grand County, I not only had taxes of about $200 to $300 per year but also HOA dues of $270 to $350 per year.
The third way is to do a "Quiet Title" suit with an attorney to get a marketable title. The attorney files a lawsuit against the prior owner and all "unknown" people to bring to court any claims they have on the property. I did that with one property in Grand County and ended up paying a smidgen over $5,000 for the quiet title suit. You may be able to do a pro se suit or have an attorney assist you on a pro se lawsuit to save money, but I hadn't looked into that deeply enough to attempt this yet.
The fourth way, apparently, is to use a company like Meridian Title to certify the tax lien sale and then they apparently underwrite the title company here in Colorado to do the warranty deed and purchase title insurance.
I had called Meridian Title and talked to Brenda Flattery about the Tax Sale Certification process. She assured me that they have done "quite a few" of these in Colorado over the past three to four years. To start, they want a $350 deposit and then a varying amount depending on the sales price at the closing ($1,450 for a property selling for under $25K, $1,950 for a property between $25K and $75K, etc). She said the normal process is to wait until you have a buyer and then send them the $350 deposit to start the process and they take about three weeks to certify the title. It doesn't make sense to pay the deposit up front, since the pre-certification work they do will expire in 6 months if you don't pay the remaining costs. Brenda stated when you have a buyer you would have your broker call Meridian to get the process going and they would handle the rest. I figured it since there was no money up front it was worth a gamble to see if I could sell these properties sooner rather than later.
I used a pretty good Realtor (Shanna Lalley of RE WinterPark) who is pretty successful and knowledgeable in Grand County. She had never heard of Meridian Title either, but was willing to give this a chance and work with them. We listed the properties and got an offer on two. For the first one to close, we e-mailed the paperwork to Meridian, and then I had to physically send them a check (they couldn't do a credit card or EFT, they only accept wire transfers or checks). It took a week for them to get the check, cash it, and start the process. I got an e-mail about a week and a half later from Land Title and Guarantee Company, which is a well-known Title Company in Colorado, that they would be handling the closing and doing the title commitment. So all seemed well.
When the Title Commitment came back from Land Title it originally required a quiet title suit. However Meridian and Land Title conferred and then removed that requirement. So Land Title was then able to offer Title Insurance.
The whole process took over three weeks from the date they started (apparently fall is Meridian's busy season). My broker extended the closing by a few days and we closed October 7th. The buyers went to a Land Title office in Grand County and I went to one in Denver and it was flawless. I'm happy to report that Meridian Title's Tax Sale Certification process is not a scam and (at least in Colorado) I was able to sell a Treasurer's Deed land I got about two years ago with a warranty deed and title insurance. The cost (for this property) was $1,450 ($350 paid by check and $1,100 at closing. The second closing is set for November, and hopefully some of the other properties will also sell this year. read more
