Can Realtors Check Title History on Foreclosed Homes?

14 Replies

I can't call a realtor right now because it is late at night, so I just thought I'd ask you guys; can realtors check title histories?

I met a buy & hold investor the other day and I'm challenging myself to find him a good deal and get myself started with wholesaling, but I first need to be aware of methods for sifting through foreclosure deals to find ones that investors will actually buy.

I need clean titles!

Also, I heard foreclosed properties can be reclaimed by the original owner within a certain timeframe after repossession depending on where you are. How do I know if that timeframe has ended?

Thanks in advance to anyone who can help.

Originally posted by @Khenan Newton :

I can't call a realtor right now because it is late at night, so I just thought I'd ask you guys; can realtors check title histories?

I met a buy & hold investor the other day and I'm challenging myself to find him a good deal and get myself started with wholesaling, but I first need to be aware of methods for sifting through foreclosure deals to find ones that investors will actually buy.

I need clean titles!

Also, I heard foreclosed properties can be reclaimed by the original owner within a certain timeframe after repossession depending on where you are. How do I know if that timeframe has ended?

Thanks in advance to anyone who can help.

 Generally, Realtors rely on title insurance companies to search title history. The only situation where I have heard of a foreclosure being reversed is if the homeowner can prove a mistake was made or if they are in bankruptcy. Even then, the buyer of the foreclosure would have their money refunded. 

@Khenan Newton Realtors typically have some searching capabilities through title reps that solicit their business or through their own MLS access. The title rep can give the realtor online access to their title companies online platform whichit makes available to its customers. If you know a title rep, you can get this access too. This will give you some basic info culled from public records. You need to verify what you find through other sources since these title company resources will not be 100% accurate. It could be a good place to start for what you're looking to do.

Some states do have redemption periods during which the owner has time to come up with the funds to payoff the mortgage and redeem their property after a foreclosure sale. We stay away from those states and won't buy non performing notes in them. Here's a list put out by a servicer, Madison Management, that shows a breakdown. (I would verify any info since these things change and I would want to know 100% before putting any capital at risk)

http://madisonmanagement.net/investors/foreclosure...

 @Matt Shields a lot of the resources I've looked at are averse to buying foreclosures for the very possibility that someone could come back and take back their house, causing the investor to lose money. What states refund invested capital? This is the first time I've heard of this

@Andy Mirza So basically some realtors would be able to search up title histories, and by requesting them from another resource?

And what other resources could I check other than title companies?

Thanks for that list. I live in Pennsylvania so I'm going to look more into this. It looks like Pennsylvania doesn't have a grace period.

Originally posted by @Khenan Newton :

 @Matt Shields a lot of the resources I've looked at are averse to buying foreclosures for the very possibility that someone could come back and take back their house, causing the investor to lose money. What states refund invested capital? This is the first time I've heard of this

 I'm in Arizona and can only speak to our trustee sales. If a trustee auction allowed any sale to be retroactively canceled and the buyer's money not refunded, I can't imagine anyone participating. HOWEVER, there are plenty of other ways to lose money at a trustee sale.

Originally posted by @Khenan Newton :

@Andy Mirza So basically some realtors would be able to search up title histories, and by requesting them from another resource?

And what other resources could I check other than title companies?

Thanks for that list. I live in Pennsylvania so I'm going to look more into this. It looks like Pennsylvania doesn't have a grace period.

 Keep in mind that a title search is NOT title insurance, and if something is missed, or you're not first position, it's your problem. As always, seek professional advice. 

BTW. Realtors rely on title companies and may be hesitant to do a title search even if they have records access because of the liability issues. Agents often get themselves into trouble by working outside of their field of expertise. 

Originally posted by @Khenan Newton :

 @Matt Shields a lot of the resources I've looked at are averse to buying foreclosures for the very possibility that someone could come back and take back their house, causing the investor to lose money. What states refund invested capital? This is the first time I've heard of this

Ohio has 30 days grace period after foreclosure sale: owner has the right to pay off all the debt and redeem the property.

The investor get paid money back within a month or two, and if you borrowed cash to pay for the sale - too bad - you'll get only the principal, what you paid.

I've got twice in such hassle: once on tax sale and once on regular residential sheriff sale

Originally posted by @Irina Belkofer :
Originally posted by @Khenan Newton:

 @Matt Shields a lot of the resources I've looked at are averse to buying foreclosures for the very possibility that someone could come back and take back their house, causing the investor to lose money. What states refund invested capital? This is the first time I've heard of this

Ohio has 30 days grace period after foreclosure sale: owner has the right to pay off all the debt and redeem the property.

The investor get paid money back within a month or two, and if you borrowed cash to pay for the sale - too bad - you'll get only the principal, what you paid.

I've got twice in such hassle: once on tax sale and once on regular residential sheriff sale

 That's not good. What if you dump a lot of money into the rehab and the sale is rescinded? I guess you would just have to wait and eat a month of carry cost before beginning rehab.

@Matt Shields it can't happen: for these 30 days Sheriff department won't release the title.

You'll get sheriff deed only after everything is final. Before you get the deed, you can't start working on the property....well, you can but it's not the right thing to do. When I go this route, I usually research how the property get foreclosured to make sure there is nobody to claim the ownership.

Same is  with carry costs: taxes are prorated to the date when the deed is recorded. They started doing it recently till the date of sale but only when market is overpriced....then you're lucky to even get anything for the reasonable price...and $200-300 in taxes won't be matter

Originally posted by @Khenan Newton :

@Andy Mirza So basically some realtors would be able to search up title histories, and by requesting them from another resource?

And what other resources could I check other than title companies?

Thanks for that list. I live in Pennsylvania so I'm going to look more into this. It looks like Pennsylvania doesn't have a grace period.

 Yes and as Matt mentioned, most realtors aren’t going to want to do this for you. If you’re buying foreclosures at the sale, this is something you, as the investor, need to do yourself. Find a title rep to get access to their online resource. They should also have a customer service line where you can talk to one of their employees who has access to a system much better and more accurate than their online version.

For CA, OR, AZ, and NV I highly recommend propertradar.com. Ask other investors what they use in PA

@Khenan Newton

Depending on the county where the property is located, you can try to do a bulk of the research yourself. Also note that foreclosure sale attorneys often need to do a title search as part of the foreclosure process. If the attorney works for a foreclosure mill (i.e. law firms that only work on foreclosure), some of them provide some of the information to you online (e.g. what the upset sale price is at the sheriff's sale). 

 I would suggest that you do a bit more research on titles. It's often not as a straight forward concept as saying this title is "good" or "bad". The most important concept to understand is "good marketable title" --- this more or less means a title that most title insurance companies are willing to insure. What you need to do to get such a title depends on the circumstances and the appetite of the particular title agent. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.