I have recently purchased a home that had been repossessed by the VA. After setting the closing date, my real estate agent called to say the VA does not know if it will have the warranty deed in time for the closing, so rather than delay the closing, they would like to close with a quitclaim deed and have the warranty follow up at a later date. How much jeopady am I in if I agree to this arrangement?
3 Answers from Attorneys
Sounds hinkey to me. If the VA does not have good title to the property, then your purchase could be invalid. A quitclaim deed conveys only what the "grantor" owns, and if the grantor's title is fouled up somehow in the foreclosure process, then you get the same fouled up title.
Not clear why they could not give a Warranty Deed. Definitely do not go into this thing w/o an attorney. Everthing needs to be looked over before you sign anything here. The government is great at screwing things up and creating delays w/its problems of the left hand not knowing what the right hand is doing, so it might be something on that order. But, beware.
You are entitled to no less than a warranty deed. If you pay for the property at closing and get less than full title, you may end up with years of effort and expenses to rectify the situation. Hold out for the proper title transfer. You or your agent should also order up a title policy so that you are protected in case of a title flaw.