Title searching

A title company can perform a title search for you along with some other private companies that specialize in doing title searches. An example of a private company would be www.ProTitleUSA.com – realize I’m NOT recommending them, I’m providing you an opportunity to do your own research to find what company will provide you the most complete information as cost effective as possible. You can do a quick online search to find other companies that provide title searches. A title search can be anywhere from $150 - $400.

The purpose of a title search is to determine the owner of the property, make sure there are no “clouds” on the title … which would include any the liens on the property and the judgments against the owners that may attach to the property.

The longer you are investing in real estate, the more you’ll be working with a REALTOR(s) who have connections with title companies where in many cases they can provide you a title report as little as $40 or charge you nothing at all. I was an active REALTOR for 13 years and I worked with two title companies and they would provide me or my clients a free title search, simply because I had brought them so much business.

Depending on what you’re doing as you’re getting started in real estate investing, there might not be a need for you to have a title search performed … again, depending on how you’re investing…wholesaling (assignments of contract or double closing), etc.

Title companies are the most common source for accurate title searches. Title insurance can protect their search and your interests in the event that something was missed in the search or another party makes a claim to ownership.

As a first step in research, however, you can complete a basic search yourself. Simply go down to the county records department or search online since many register of deeds have online databases of recorded documents. The property record will give a list of recorded documents which are attached to the property. This will inform you about changes in ownership and recorded liens on the property. This can be a first step but in the end, I always recommend a title company insure the property.

Drew are you implying that you don't need a title search if you are wholesaling? Just getting started, wholesale is one of my strategies. i was wondering if its a good idea to secure deals before knowing of any liens or issues with property.

Thanks in advance and please excuse the ignorance, just want to cover all bases.

Hey Christopher, that is a good question and I’ll give some background about wholesaling before I address your question.

When you are doing wholesaling (bird dogging, assignments, double closings), your first step will be to find and qualify cash buyers. In other words you’ll need to implement a multitude of methods to find cash buyers and then you’ll need to find the details as to what they want to purchase…this is where you will qualify them. When I say “qualify” them, I’m not talking about having them go to a mortgage lender to get qualified for a conventional mortgage…this is where you’ll go through some questions in order to know
what it is they want to purchase.

Generally speaking, you’ll need to determine; what type of property they are looking to purchase, where they want to purchase, what is their maximum purchase price, what profit margin do they need, etc. When it’s time to write the offer, you will also take into consideration YOUR profit….

When you have this information you will be more effective in locating properties that your meet your buyer’s criteria. This way you’re not wasting neither YOUR time nor THEIR time by bringing them properties that do not meet their investment needs.

Since they are buying the property….they will be doing their own due diligence to find out if there are any liens on the property.
So your buyers will be paying for their own title search.

In the previous reply, Simon made a good point about using county resources to check a property’s title.

This can generally be done online … www.NetrOnline.com is a really good website because it will give you online access to almost every county’s public records for properties. When you go to the website you’ll want to do the following;
1)On the top of the page click on the link entitled, “Public Records Online”
2)Click on the state you want to research
3)The next screen will list all of the counties in that state
4) Click on the pertinent county & from here you can click on the links that will take you to the county’s various websites that will provide public information on a property.

When you have a property that matches your cash buyer’s needs & you give him/her the information they requested and if you also give them some basic research on the property…you’re showing that you are willing to go the extra mile. Even though this is not necessary, it will build a stronger relationship. At the end of the day, if your buyer decides to purchase
a property, they will do their own homework to ensure everything is in order.

As an investor, I work constantly work with wholesalers to locate properties for me but I will have my title company do a title report
if I decide I’m going to make a purchase.

In answer to Matt's orginal question about title searches, the best way to know what liens are against the property is to get a title company to do a Preliminary Title Report (PTR), which they do for free all the time for realtors on properties they have put into contract with the expectation that they will get paid for doing the final title search and insurance. If the contract doesn't go through for any reason the title companies do not charge the realtors or seller or buyer for the PTR. It is just part of their doing business. The title companies also doing searches of owner names for property list for brokers and their agents for free. As a broker myself I enjoy that service regularly. They do however, charge the general public for such services. So, the best way to do business as a non realtor is to utilize the services of a realtor. Create a close relationship with a competent agent who can send you leads on properties, do CMA reports, assist you with writing up REPC's, AND get PTR on the property for you for free. When you put a property into contract, the realtor will immediately submit that contract to the title company to do a PTR for you, so use realtors.

Since the my buyer will do a title search, as a wholesaler do I also need to
do a title search? If so how much does it cost.

I have a lot of respect for title companies. I have found them to be very reliable through the years. They do a great job of getting the papers ready for closing and getting needed research done. The requirements for a title company are very strict in most states. Because of that there are very few errors committed by title companies.

Most title companies will not rush a deal just to make people happy. They know and understand the need to get things right. Remember this the next time someone blames the title company. Remember, they are simply protecting all involved.

I have been trying to get info on a home I found and I believe may be in the foreclosure process. The reason I say that is because a Property Preservation Co. has obviously gone in and secured the home. I went to the County courthouse to try and find a forwarding address on the previous owner or find which bank has the house. Of which the courthouse does not info on either.
What should my next step be? Is a Title Co. my next step?

Steve

Im thinking about becoming a coach one day in the future.

God bless
Add us to your buyers and sellers list asap.

go to youtube and google "title search"

Individuals outside of the title abstracting industry occasionally will inquire about doing their own title searching. How realistic is it for an ordinary person to perform their own title search? The records system is designed for ordinary and reasonable person to use for searching. While most people consider it more cost effective and accurate to hire a professional title abstractor to do a search, it is theoretically possible to do your own search. There are 5 factors to consider to determine if this is a reasonable expectation.

1. Availability of information – All land title documents are public records. They are maintained in a government records office, normally at the county level. (In some states, particularly New England region, keep title records at the city and town level). Any ordinary person can visit the deed recorders office and access the documents needed to complete a search. Some counties may offer access to these documents using an online system as well. However, some of these systems may not access all of the records. Using online systems should be carefully considered and analyzed before using. Ordinary non-professional searchers should stick with using in-person records searches at first. Although slightly less convenient than searching online, it is a better and more accurate way to work through the documents for inexperienced searchers.

2. Complexity of process – Although the records are available for public access, there is a process required to locate all of documents to perform a search. The first thing an inexperienced searcher will discover is that there is no one document or even one file for each property. The current property status is determined by piecing together the prior events pertaining to the property. Each previous sale, transfer, mortgage, refinance, mortgage release, lien, assignment, etc. are part of a big picture that makes up the property “title”. Overlooking one of these prior events can change the results of the search. Understanding this, the searcher will find that these records are not all grouped together. They are filed in order by the date they occurred. So a mortgage from 2005 will be filed in a book from that year, while a deed from 2008 will be in a different place altogether. There is a system to locate all of the documents, using a name index. However, this system identifies the documents by name, not by address. So the searcher will need to first determine the names associated with the property over time.

3. Potential for error - The process for searching title is relatively straightforward, but tedious. Dozens of steps must each be followed in specific order to ensure good results. A reasonable person can easily accomplish this, as long as they pay very close attention to each detail, and think about all the possibilities as they progress through the steps. Rushing through the process or assuming you have everything are to be avoided.

4. Accuracy of results – Once all of the various deeds, mortgages, and liens have been found the documents themselves contain a great deal of information. Typical documents are multiple pages, and list the terms and conditions of the land record. Reading the content of the records is an important part of the process. For example, while a deed might describe a transfer from John Smith to Mary Jones, there may also be language in the deed specifying a remainder interest to a third person, or that the property reverts back to John Smith if Mary Jones dies, or the property is not used for a particular purpose, etc. A mortgage document may contain names of other parties who have some ownership interests, which names also need additional searching. Inexperienced searchers will discover a great deal of information within the document wording. Looking beyond the first section containing “grantor, grantee, and date” is part of the tedious process of complete searching.

5. Understanding of title status – Once the entire process of retrieving, reading, analyzing, and comparing all the property records is complete, the searcher needs to understand what it all means. It is reasonable to conclude who the owner, lender, and lienholders might be, but a searcher needs to understand the limitations of how absolute the conclusions are. There may be other claims against a property not contained just in the land title records. The tax assessor collects taxes each year, some of which are currently due. A property owner may have obligations to a homeowners association, or zoning board. In addition, judgment liens may have attached to the property outside of the land records through statutory civil court actions. The searcher should become aware of what title claims can exist in their jurisdiction, outside of the land records.

An ordinary and reasonable person can complete a correct title search for most properties. In some cases an unusual or tricky scenario can complicate a search to produce errors which a normal person would not discover, but these are relatively uncommon. While ordinary people do have the ability to do their own searches, most do not. A total of 4 or 5 hours is usually allocated to performing a title search, and another 1 hour for reviewing the documents. While there is little cost involved (a county may charge a nominal copy charge of $15 – $25 to produce copies of files for a typical property).

When the cost of a professional search is taken into consideration, most reasonable people opt to spend the $100 or so to have an experienced abstractor complete the search, to make sure they have some security on a $100,000 or more decision. dave