5 Critical Details When Inspecting A Property’s Title

By on October 22, 2017

When acquiring real estate for investment purposes, you will need to familiarize yourself with looking at property titles.

This importance magnifies when you consider that a lot of the houses you are eyeing might be in special markets like foreclosure and bankruptcies as the information on the titles might not be straight forward as you are used to.

Surely you don’t want to buy a house from someone who have no legal right to sell it?

This is why you should pay special attention to a few items when inspecting the title work and deed for questionable discrepancies.

1) Mortgagor

You might not expect the names of the mortgagors and the names of the title owners to be different.

But it is not out of the ordinary for that to happen.

When the name of the mortgagor and the title owner does not tally, it should serve as an alert to thread carefully and do more research before investing.

2) Previous mortgagors

This is to learn more about the ownership history and to find gaps that make no sense.

For example, if there were 4 previous owners in which Sally sold to Jenny and then Anna sold to Ashley, an ownership gap would exist between Jenny and Anna.

The question is who in the world sold the property to Anna that enabled her to sell to Ashley?

In such cases, there is almost always a legitimate explanation to the odd circumstances. But you need to know the details in case something truly fishy is going on which have not been discovered by you.

You title company should be able to dig up more information about these issues.

3) Deed warranty names

The name of the homeowners should match with the names on the deed.

Another red flag just like point #1.

Take note of it and make it a point to do more in-depth research. The title definitely deserves more scrutiny.

4) Property price

For most people, this piece of information raises the most curiosity.

You might be able to find some leverage over negotiations when you know how much the house was originally bought for.

If the information was pretty recent, it can also give you a good indication of the value the property is worth in the current market.

5) First mortgage mortgagee

This refers to the lender in possession of the first lien on the real estate.

Note that depending on the age of the house and the number of ownership transfer that took place in the past, that mortgagees can change from time to time.

You are specifically interested on who or what organization currently holds the senior lien.

Knowing this detail allows you trace the lender in which you need to speak to in order to make a deal.

If you are a beginner in real estate investments, it is recommended that you consult with proper title companies.

Only go out on your own when you are familiar with what you are dealing with and able to understand what the details on titles mean and their implications.



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