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Buying a house from someone who currently does not own the title

Atomfun

Star Member
Feb 9, 2021
68
14
Hi Everyone,
I am buying a home in Canada. However I am buying from someone who is flipping this house for profit. I have few questions here

1. My realtor says this property is still not transferred to the person from whom I am buying. He said this should not be a problem. could you please suggest if this is okay?
2. I am buying title insurance on this. Will that help if things go sideways ?
3. ANy other things I should consider ?

@legalfalcon - Appreciate if you could kindly share your thoughts as well.

Thank you!
 

canuck78

VIP Member
Jun 18, 2017
52,959
12,760
Hi Everyone,
I am buying a home in Canada. However I am buying from someone who is flipping this house for profit. I have few questions here

1. My realtor says this property is still not transferred to the person from whom I am buying. He said this should not be a problem. could you please suggest if this is okay?
2. I am buying title insurance on this. Will that help if things go sideways ?
3. ANy other things I should consider ?

@legalfalcon - Appreciate if you could kindly share your thoughts as well.

Thank you!
Who owns the property then if the person is not the listed owner? Is this a new build and still under construction?
 
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scylla

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1. My realtor says this property is still not transferred to the person from whom I am buying. He said this should not be a problem. could you please suggest if this is okay?
This alone is a massive red flag. Stay far away from this deal and get a new realtor.

Your realtor is either part of a scam or massively incompetent.

You should absolutely not be buying a house from someone who doesn't own the title. Title insurance is not going to protect you. The person's name needs to be on the title if you want title insurance to protect you. Title insurance isn't going to protect you from giving money to someone who doesn't even own the house.
 

Atomfun

Star Member
Feb 9, 2021
68
14
Thanks everyone for the responses. Here are some more details .

Province: Alberta
Property type : Not a new building.

Here is the situation
1. The house was owned by a Person 'A 'since 2015.
2. Person X bought this house from A in September and requested for a title transfer
3. Title transfer from A to X is still pending
4. Person X decided not to live in that house due to personal reasons and decided to sell immediately
5. now I am planning to buy it from person X

Technically on the land title person A is still the owner but the title deed shows pending transaction from A to X.

While the title transfer is still pending, Can I buy the house from X
 

scylla

VIP Member
Jun 8, 2010
92,541
20,360
Toronto
Category........
Visa Office......
Buffalo
Job Offer........
Pre-Assessed..
App. Filed.......
28-05-2010
AOR Received.
19-08-2010
File Transfer...
28-06-2010
Passport Req..
01-10-2010
VISA ISSUED...
05-10-2010
LANDED..........
05-10-2010
Thanks everyone for the responses. Here are some more details .

Province: Alberta
Property type : Not a new building.

Here is the situation
1. The house was owned by a Person 'A 'since 2015.
2. Person X bought this house from A in September and requested for a title transfer
3. Title transfer from A to X is still pending
4. Person X decided not to live in that house due to personal reasons and decided to sell immediately
5. now I am planning to buy it from person X

Technically on the land title person A is still the owner but the title deed shows pending transaction from A to X.

While the title transfer is still pending, Can I buy the house from X
Why is the transfer still pending? Something must be wrong if the title hasn't been transferred yet. Title transfers don't take this long. Has your agent told you what has gone wrong that's resulting in the title transfer taking this long / being delayed?

Title insurance isn't going to protect you from this going sideways. You are buying a house from someone who doesn't actually own it.

This is a hot mess and something is wrong here. I would stay far far away.
 

steaky

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Nov 11, 2008
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In any case you need a lawyer in order to complete the transaction. Ask the lawyer if it's okay.
 

Atomfun

Star Member
Feb 9, 2021
68
14
Another update..

I spoke to a Lawyer and he said it should be fine as we are getting all the legal documentation from Seller's Lawyer.

I also called couple of registry services in the city and they mentioned currently title transfers are taking more than 2 months to transfer from one owner to another owner
 

foodie69

Champion Member
Dec 18, 2015
2,811
830
While your post is from a couple of years back, it's great to see you seeking advice on purchasing a property, especially one being flipped for profit. Let's address your questions:

1. Your realtor's suggestion still holds true. Property transfers that are pending during a purchase can be managed effectively, provided all legal procedures are followed meticulously. Make sure the necessary steps are taken to ensure a smooth transfer.

2.Your decision to invest in title insurance remains a prudent one. Even after two years, title insurance offers an extra layer of protection against unforeseen issues related to the property's ownership history.

It's a safeguard that can prove invaluable if things don't go as planned.
Spam
 

milon45

Star Member
Jul 10, 2023
75
4
Hi Everyone,
I am buying a home in Canada. However I am buying from someone who is flipping this house for profit. I have few questions here

1. My realtor says this property is still not transferred to the person from whom I am buying. He said this should not be a problem. could you please suggest if this is okay?
2. I am buying title insurance on this. Will that help if things go sideways ?
3. ANy other things I should consider ?

@legalfalcon - Appreciate if you could kindly share your thoughts as well.

Thank you!
move in cleaning 30a
Buying a home, especially one that's being flipped for profit, can come with specific considerations. Here are some insights to address your questions:

  1. Property Transfer Status: It's not uncommon for a property to still be in the seller's name during a real estate transaction, especially if the sale is in progress but not yet completed. However, this should be handled carefully. Ensure that there is a legally binding agreement in place between you and the seller, specifying the terms of the sale and the date of transfer. Your lawyer or notary should oversee this to ensure a smooth transition of ownership.
  2. Title Insurance: Purchasing title insurance is generally a good idea. Title insurance can help protect you in case there are issues with the property's title, such as liens, encumbrances, or defects that were not discovered during the purchase process. It provides financial coverage for legal fees and losses related to title issues. Be sure to carefully review the terms and coverage of the title insurance policy to understand what it does and does not cover.
  3. Other Considerations:
    • Home Inspection: Given that the property is being flipped, it's crucial to have a thorough home inspection. This can help uncover any hidden issues or shortcuts taken during the renovation process.
    • Contract Terms: Review your purchase contract carefully. Ensure it includes provisions for inspections, financing contingencies, and specifies the responsibilities of both parties in case of unexpected issues.
    • Renovation Quality: Assess the quality of the renovation work. Ensure that any necessary permits were obtained, and that the work was done to code. Poorly executed renovations can lead to problems down the road.
    • Property History: Check if there is a property history report available. This can provide insights into past issues with the property, such as insurance claims, repairs, or environmental concerns.
    • Legal Representation: Consider hiring a real estate lawyer or notary public who specializes in real estate transactions. They can protect your interests and ensure all legal requirements are met.
In summary, while it's not unusual for a property to still be in the seller's name during a real estate transaction, it's crucial to have a legally binding agreement and to exercise due diligence. Title insurance can provide an additional layer of protection, but it's essential to understand its coverage. Ultimately, consulting with professionals such as a real estate lawyer and a qualified home inspector is advisable to navigate the purchase smoothly and protect your interests.
 

Raptor33

Hero Member
May 10, 2020
380
139
Buying a home, especially one that's being flipped for profit, can come with specific considerations. Here are some insights to address your questions:

  1. Property Transfer Status: It's not uncommon for a property to still be in the seller's name during a real estate transaction, especially if the sale is in progress but not yet completed. However, this should be handled carefully. Ensure that there is a legally binding agreement in place between you and the seller, specifying the terms of the sale and the date of transfer. Your lawyer or notary should oversee this to ensure a smooth transition of ownership.
  2. Title Insurance: Purchasing title insurance is generally a good idea. Title insurance can help protect you in case there are issues with the property's title, such as liens, encumbrances, or defects that were not discovered during the purchase process. It provides financial coverage for legal fees and losses related to title issues. Be sure to carefully review the terms and coverage of the title insurance policy to understand what it does and does not cover.
  3. Other Considerations:
    • Home Inspection: Given that the property is being flipped, it's crucial to have a thorough home inspection. This can help uncover any hidden issues or shortcuts taken during the renovation process.
    • Contract Terms: Review your purchase contract carefully. Ensure it includes provisions for inspections, financing contingencies, and specifies the responsibilities of both parties in case of unexpected issues.
    • Renovation Quality: Assess the quality of the renovation work. Ensure that any necessary permits were obtained, and that the work was done to code. Poorly executed renovations can lead to problems down the road.
    • Property History: Check if there is a property history report available. This can provide insights into past issues with the property, such as insurance claims, repairs, or environmental concerns.
    • Legal Representation: Consider hiring a real estate lawyer or notary public who specializes in real estate transactions. They can protect your interests and ensure all legal requirements are met.
In summary, while it's not unusual for a property to still be in the seller's name during a real estate transaction, it's crucial to have a legally binding agreement and to exercise due diligence. Title insurance can provide an additional layer of protection, but it's essential to understand its coverage. Ultimately, consulting with professionals such as a real estate lawyer and a qualified home inspector is advisable to navigate the purchase smoothly and protect your interests.
  1. It is not advisable to buy a property that is not yet transferred to the seller. This is because there is a risk that the seller may not be the rightful owner of the property. If the property is later found to be owned by someone else, you may lose your investment.
  2. Title insurance can help protect you in case there are any problems with the title to the property. However, it is important to note that title insurance does not cover all risks. For example, it does not cover problems that are caused by your own negligence.
  3. Here are some other things you should consider when buying a house from a flipper:
  • Get a home inspection to make sure that the property is in good condition and that there are no major repairs needed.
  • Ask the flipper to provide you with all of the relevant documentation, such as the property's title, survey, and inspection reports.
  • Be sure to negotiate the price of the property. Flippers often mark up the price of the property to cover their costs and make a profit.
  • Get everything in writing, including the purchase price, closing costs, and any other terms of the sale.
I hope this information is helpful.

Here are some additional things to consider when buying a house from a flipper in Canada:
  • The new anti-flipping rule in Canada means that flippers who sell a property within 12 months of purchase will have to pay taxes on their profits as business income, rather than capital gains. This could make it more difficult for flippers to make a profit, and could lead to lower prices for buyers.
  • The Canadian Real Estate Association (CREA) has a set of guidelines for home flippers, which include disclosing all known defects in the property, providing a home warranty, and completing all necessary repairs before the sale. Make sure that the flipper you are working with is following these guidelines.
  • Be aware of the risks associated with buying a house that has been flipped. Flippers often cut corners on repairs and renovations, which can lead to problems down the road. It is important to have a home inspection done by a qualified professional before you buy the property.
I hope this helps!
 

Wolfpmd3

Champion Member
Apr 26, 2015
1,866
454
Canada
NOC Code......
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Hi Everyone,
I am buying a home in Canada. However I am buying from someone who is flipping this house for profit. I have few questions here

1. My realtor says this property is still not transferred to the person from whom I am buying. He said this should not be a problem. could you please suggest if this is okay?
2. I am buying title insurance on this. Will that help if things go sideways ?
3. ANy other things I should consider ?

@legalfalcon - Appreciate if you could kindly share your thoughts as well.

Thank you!
So you want to buy a house from someone who does not own the house?

Interesting, I am just wondering whether you would give money to someone selling a car who does not actually own the car?

I think that if anyone needs to tell you how wrong this all sounds you have much bigger issues,
 

steaky

VIP Member
Nov 11, 2008
14,298
1,628
Job Offer........
Pre-Assessed..
  1. It is not advisable to buy a property that is not yet transferred to the seller. This is because there is a risk that the seller may not be the rightful owner of the property. If the property is later found to be owned by someone else, you may lose your investment.
  2. Title insurance can help protect you in case there are any problems with the title to the property. However, it is important to note that title insurance does not cover all risks. For example, it does not cover problems that are caused by your own negligence.
  3. Here are some other things you should consider when buying a house from a flipper:
  • Get a home inspection to make sure that the property is in good condition and that there are no major repairs needed.
  • Ask the flipper to provide you with all of the relevant documentation, such as the property's title, survey, and inspection reports.
  • Be sure to negotiate the price of the property. Flippers often mark up the price of the property to cover their costs and make a profit.
  • Get everything in writing, including the purchase price, closing costs, and any other terms of the sale.
I hope this information is helpful.

Here are some additional things to consider when buying a house from a flipper in Canada:
  • The new anti-flipping rule in Canada means that flippers who sell a property within 12 months of purchase will have to pay taxes on their profits as business income, rather than capital gains. This could make it more difficult for flippers to make a profit, and could lead to lower prices for buyers.
  • The Canadian Real Estate Association (CREA) has a set of guidelines for home flippers, which include disclosing all known defects in the property, providing a home warranty, and completing all necessary repairs before the sale. Make sure that the flipper you are working with is following these guidelines.
  • Be aware of the risks associated with buying a house that has been flipped. Flippers often cut corners on repairs and renovations, which can lead to problems down the road. It is important to have a home inspection done by a qualified professional before you buy the property.
I hope this helps!
Things to consider after watching this recent W5 episodes:

 

steaky

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Nov 11, 2008
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Just to add: looks like you need to hire a surveyor especially buying a vacant lot!