Preliminary title search

if you have had any stories or experiences with not getting a prelim title done please share with us here.!!

Thanks for the lesson. I would defiantly ask for this type of search when Im ready to buy my first property.

Hey Jay!

Funny that you post this. I had a recent run-in with running prelim title. I ALWAYS have my title company run title when we are looking to pick up a property. I have a guy that bought home via quit claim deed from a county tax surplus sale. When going into contract with him, he assured and reassured me that he could convey clear title ( I never do quit claim deeds when purchasing). After running prelim title I found out that there are two mortgages against the property from previous owner for over $60k even though the guy I'm buying from only paid $15,000. Now we have to re-negotiate the contract because the title company is willing to put the property through a tax sale certification and make sure the previous lien holder was served notice, ultimately removing the liens...but there's a cost involved...of course! ALWAYS DO YOUR DUE DILIGENCE people, this includes running prelim title work. The contracts the Dean has given us cover conveying clear title (among many other things), so be sure to use them

I always do a title check when I am interested in a property, especially when I send out my yellow letters. That way when I do talk to them and ask them questions, I can quickly verify their truthfulness in what they're telling me. But it also gives me a good idea on where they stand as far as the house being, Free and Clear, Underwater or how old their mortgage(s) are. Before I ever talk to the homeowner, I have a good idea of whether to Wholesale, Buy and Hold, or take the house Subject To. Prelim's are the foundation to all my offers.

Thank you for sharing Jay and Lenee!

Great!!! It is absolutely something you should do to prevent going further with the deal and wasting time and energy. Good luck my friend and don't stop moving forward !!!

Great story or should I say experience that shows the importance of prelim title !!!! I have many of them also of when I DIDNT do them and learned a few lessons ) congrats on all you have accomplished !! )
Jay

I would also highly recommend title insurance. My parents bought a home in NC and waived title insurance (not required there). When it came time for them to sell, they found out there was a break in the chain of title. One of the daughters never signed off on the property transfer. Long story short, 2 years later and several thousands in lawyer fees, they still have the house.

Very good advice Simon !!

Thx so much Jay for the info you da bomb!

Normally unless negotiated otherwise - it is the sellers responsibility to have abstract done so as to be able to give clear and marketable title. The buyers responsibility to update it !!
UNLESS negotiated otherwise. You can ask your attorney these questions and he will explain to you. I have had many buyers and sellers try to tell me otherwise as they may not want to pay for their part. If it is such a sweet deal you may be willing to pay for some of the sellers or your buyers fees. Know and learn what are the standard practices as you can negotiate from there and you will know what you're talking about. Sit down and interview many attorneys and have a list of questions to ask them that you do not know and you will soon become an expert.
Jay

That even though the preliminary doesn't come up with any obstacles that the abstract 40 yr title search that the seller has to provide you with clear title may turn up other obstacles that may need to be addressed. I just ran into this as the prelim showed no problems on this one but when the 40 yr search was done it turned up a Lein that did nt have a release done so we had to do some work researching and getting release done before proceeding.
Lesson: do prelim and also make sure seller provides 40 yr title search/ abstract