Buying resale MVC - title search, title insurance?

[travellerviajero1]

Hello, and apologies if this was covered already. When buying a MVC deeded week, I imagine that MVC will verify that their record is clean with MFs, mortgage fully paid off, etc. However, what if the seller took out a 3rd party loan, how can I make sure to protect myself to know that the seller does not owe say 15K to a 3rd party lender? Do contracts typically cover that buyer will not take on debt of seller? I am new to this so want to make sure I later don't find out its not a clean title, or there is some type of lien that now I am responsible for amounting to a lot of money? Thanks

 

[davidvel]

Hello, and apologies if this was covered already. When buying a MVC deeded week, I imagine that MVC will verify that their record is clean with MFs, mortgage fully paid off, etc. However, what if the seller took out a 3rd party loan, how can I make sure to protect myself to know that the seller does not owe say 15K to a 3rd party lender? Do contracts typically cover that buyer will not take on debt of seller? I am new to this so want to make sure I later don't find out its not a clean title, or there is some type of lien that now I am responsible for amounting to a lot of money? Thanks

It doesn't matter if the seller owes money, it only matters if any loans are secured by the property. You can buy title insurance from 1st American for about $250. This will search for any encumbrances and provide title insurance.

 

[travellerviajero1]

thanks, but how could I be sure that there are no loans secured by the property? Is the only way to buy title insurance?

It’s fine should the property be taken later from me at worst let’s say, just don’t want to end up taking on say a 15k debt unknowingly later on

 

[sponger76]

thanks, but how could I be sure that there are no loans secured by the property? Is the only way to buy title insurance?

It’s fine should the property be taken later from me at worst let’s say, just don’t want to end up taking on say a 15k debt unknowingly later on

If you're not signing anything that specifically says you are agreeing to assume a loan, you won't be taking on a loan. It might be different if you were buying a company that has debts, but you are simply buying a deed. While a deed can be collateral in a legal entity's debts, a deed in and of itself isn't a legal entity that can own any debts. So aside from annual maintenance fees or special assessments imposed by the HOA or property taxes imposed by governments at different levels, there are no unspecified debts you would be liable for by acquiring it.

 

[jabberwocky]

It would be highly unlikely that a third party would accept a timeshare interest as security for a loan. The only loans you would need to worry about would be those from the developer (who could have resold the debt to someone else - but it would still be developer serviced). The developer loan would definitely come up in the transfer as they likely wouldn't allow a transfer with a loan in place unless you agreed to take over the payments.

If you're worried about this title insurance is relatively cheap peace of mind.

 

[dioxide45]

You can always do a search yourself of county records to see if there are any liens recorded against the property.

 

[davidvel]

If you're not signing anything that specifically says you are agreeing to assume a loan, you won't be taking on a loan. It might be different if you were buying a company that has debts, but you are simply buying a deed. While a deed can be collateral in a legal entity's debts, a deed in and of itself isn't a legal entity that can own any debts. So aside from annual maintenance fees or special assessments imposed by the HOA or property taxes imposed by governments at different levels, there are no unspecified debts you would be liable for by acquiring it.

This is incorrect. Any loan secured by the deed would be the responsibility of the buyer. No different than any other property. It has nothing to do with a legal entity.

 

[davidvel]

thanks, but how could I be sure that there are no loans secured by the property? Is the only way to buy title insurance?

It’s fine should the property be taken later from me at worst let’s say, just don’t want to end up taking on say a 15k debt unknowingly later on

As Dioxide notes, you can do a lien search yourself, but given your questions I doubt you could rely on it. How much is the property you are buying?

 

[TolmiePeak]

Why would any 3rd party lender give someone a loan backed by something of questionable value?

 

[davidvel]

Why would any 3rd party lender give someone a loan backed by something of questionable value?

Not likely, but doesn't mean it could not happen. Could also be judgment liens, or other encumbrances. Again very low possibility. Question for OP is whether value of property warrants a few hundred bucks to be certain.

 

[dioxide45]

This is incorrect. Any loan secured by the deed would be the responsibility of the buyer. No different than any other property. It has nothing to do with a legal entity.

The difference is they can't force the buyer to pay the outstanding balance, but they could still foreclose on the property and take the deed. If the buyer wanted to retain the property, they would have to satisfy the deed somehow. With traditional real estate, property transfers usually go through a title company. The title company would pull a title report in order to issue a title insurance policy. An outstanding lien would kill most deals unless it was to be paid off at closing. With a timeshare, the sale proceeds aren't usually enough to cover the outstanding lien. Though we did this with our first Grande Vista purchase in '07. It still had an outstanding loan but because prices hadn't crashed yet, we paid enough to just cover the outstanding loan. Marriott wouldn't have done the transfer without it being paid off at closing.