Real estate title searches are a crucial, but time-consuming part of purchasing any residential property. This is never truer than in regard to homes that are in the process of foreclosure.
Ensuring you’re conducting a thorough title search on a foreclosed property protects you in the long run from a whole host of issues. We’ve got six tips to help you with your real estate title search.
1. Gather as Much Information as Possible
Before you actually conduct your title search, gather all the information about the property you can. This makes the process afterward faster and more accurate. Especially if you have information about the prior owners and their purchase of the property, as well as any liens.
You can often use this information to narrow the search and get more accurate results. The realtor, lender, or previous owner may be able to help you gather this information.
2. Speak to the Lender
One of your best resources during a foreclosure is the lender. Previous owners may be uncontactable or uncooperative and withhold vital information.
The lender who holds the mortgage however is interested in making their money back by getting the property sold as soon as possible. The lender selling the property may not be the only mortgage holder recorded against the property. But even if this is the case, the lender may be able to share with you the information they hold about liens against the property.
3. Check for Further Liens
Don’t make the mistake of assuming that the first mortgage is the only recorded lien against a property. If the previous owners are in enough financial trouble, it is highly possible there are more liens against the property than just the first mortgage loan. Common examples of further liens on foreclosed properties include a second mortgage, a tax lien, or a lien from a utility company.
4. Check Violations
This is part of a standard title search process, or it should be for a thorough title search. But it’s important to check for city code or county code violations.
The owner will inherit these problems when the title deed switches to their name. They should come up during a title check. But it is good practice to check with the city code enforcement department.
If there are violations, you may be able to negotiate these fines. This could be through making repairs and knocking the price off the purchase price of the property. Or alternatively through negotiating fines with the department directly.
In instances where the house is in very poor condition, the fines may be related to the property being in a state of disrepair. Houses like this often affect the market value of the surrounding neighborhood. If this is the case, the city may be willing to waive fees if they know the house is being repaired by new owners.
Because of the potential risks of buying a foreclosed property, it’s worth cross-checking all information.
That means gathering as much information about previous owners as possible. Don’t limit this to just the most recent owner, but prior owners beforehand. Then cross-reference these with information from county records.
Where county records used to be a torturous affair of going down to the registry of deeds in the relevant county followed by hours of digging through dusty record books, the times have changed. Loads of county record offices and registries have thankfully caught up with the rest of the world and gone digital. You can check to see if your local county office has computerized with a quick call in most instances.
Then cross-reference all of this information with your title search. If any information is mismatched, there may be a problem with the title.
6. Use a Trusted Title Search Program
Using a trusted title search program saves you hours of effort, so you can better focus on your client’s needs instead.
Title Leader prides itself on eliminating the hours law firms would have spent manually title searching. Our industry-leading software automates every step of the process, allowing you to focus on other things.
Our one-of-a-kind platform is designed specifically for law firms that handle high title search volumes. In fact, we primarily serve foreclosure firms serving tax lien investors. This said for any firm needing searches in the US, we can help.
Our software is both workflow automation for your admin team as well as a national title search vendor. So we save you time not just on the title search process but dealing with the paperwork after too.
We’ve automated all 11 mandatory steps of the title search process your admin team goes through. With our software, all your admin team needs to do is use our SMART Dashboard, where all their title search needs will be in one convenient place.
Title Leader can conduct both commercial and residential title searches in all counties in all 50 states and D.C. The majority of searches are returned within 72 hours or up to a maximum of 5 days depending on the complexity of the search.
There are no subscriptions or user fees, you pay per search, for what you use.
Real Estate Title Searches
Remember, conducting thorough real estate title searches is in the best interest of your firm and your client. To ensure the best process for you, without the time costs, try a demo of Title Leader’s software today. Just get in touch.