Q: What are the requirements to upgrade a quitclaim deed to a warranty deed?
I would like to buy a large property in Colorado which was obtained in a tax sale by a 3rd party and then sold to another person who is now trying to sell the land to me.
The seller says:
"Typically if the buyer wants anything other than a quit claim deed, then the additional expenses are the buyers responsibility."
Obviously, I would like title insurance on the property, but since title insurance doesn't cover quitclaim deeds, how do I get title insurance to cover this transaction?
A:
I think the basic assumption by the seller is that the tax lien (and sale) washed away any potential hidden claims. This is not necessarily true.
A quit claim provides no protection from any claims beyond that of the grantor (as you know) and, to my knowledge, you should not be able to find any title insurance without a detailed title search. In other words, you either need a "warranty deed" or you will need to contact someone to do a detailed title search (traditionally, only lawyers handled this, but this is changing). With a detailed search you probably will be able to find an insurer.
It is your decision, but most transactions are for warranty deeds and quit claim-only deeds typically require a massive discount in price versus warranty deeded land. Quit claim deeds functionally mean "as is".
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