Emily is a distressed homeowner in preforeclosure
David is the first investor who gets to the deal but wants to offer an assignment to Richard.
Richard decides to bypass David and goes directly to Emily to work out his own deal thinking he can get a quitclaim deed from her. It’s too late because David already has the deed.
David discovers Richard’s antics and unceremoniously drops Richard. David sells out to another more ethical investor and will never do business with Richard again.
Is it really necessary to get the deed? Couldn’t you simply record a memorandum of contract?
Absolutely go for the deed. Emily, and distressed homeowners like her, can do whatever they wish until they sell the deed. Then the deed buyer who records the deed gets the true power over the property. In order to be totally safe in any transaction you need as much control as possible.
Recording a memorandum of contract will not keep Emily from selling the deed to another investor. A memorandum will stop the other investor from getting title insurance until he sues you with a slander of title lawsuit. How expensive will your lawyer be?
If Richard had managed to jump in to get the deed before David, then there would have been nothing David could have done about it. Another way of looking at it is that deeds are the firewalls of protection that keeps Richard and other ambitious competitors out.