How do I find out if a property has liens or second mortgages

Question

I am new to this and my real estate lady wants to be involved, but I would like to find this information without having to pay her to do it for me. Then I am not reliant on someone else for my decision making.

Simon Campbell · Answer

I highly recommend that a title search be completed BEFORE bidding on a foreclosure auction property. More often than not, auction properties will not transfer with a warranty deed. You are buying the interest that the creditor has in the property. For example, if a secondary mortgage is foreclosing but the property also has a first mortgage. The first mortgage transfers with the property and the buyer is now liable for it as well. The first mortgage has the legal right to foreclose on the property for non-payment and the buyer will probably lose the purchase price and the rights to the property. A title search will reveal this before you get in this "losing" situation.

Buying a REO foreclosure through a real estate agent is different. By this time, the property is completely free of all leins and will be sold with a Warranty Deed. The closing will be the same as a traditional property purchase which includes a title search and even title insurance depending on your state.

David T. · Answer

Welcome to BP Darryl. You're absolutely spot on about it; never let anyone else do your thinking for you, it's a key element to investing.

You have all the resources you need here on BP. Your keyboard can do the walking for you. Good luck with your deals!

Simon Campbell · Answer

The "free" option but the one that will take the most time is by accessing the public records either at the court house or online through their database portal.

Another option is to pay around a $100 for a title search. A local title company will do all the research for you and give you a print out of all of the title activity and what it means.

Depending on the type of transaction and where you are in the decision making process, hiring a title search can be a much less risky route.

Account Closed · Answer

Go to the courthouse and do the search.

Joe Gore

Derek T. · Answer

The state I invest in has them filed electronically so it's a matter of registering with the land records department and pulling the records up.   For me I would need to find the owner of the property through the taxation department and then pull up the owner's/property's land records up.  You will be able to see all information recorded including the deed of trust and use this to estimate what is owed if needed.  Anything more than this I would use a title company for.

Simon Campbell · Answer

That maybe a good idea. Auction foreclosures are not always the deal that they are made out to be. When a bank auctions a property, generally they will require that the minimum price cover the loan amount. Which equates to a short sale but without all the risk. Waiting until the property turns into a REO may cost a little more, but you will get a clean title, a warranty deed and have the option of buying title insurance.

One auction option that can be very profitable is tax sales. Homes that are auctioned off because of unpaid back taxes. The deal here is to not look at it as a chance to get a property for cheap (because it rarely ends up as the buyer) but rather as a money investment with a high rate of return. Most owners will eventually pay off the back taxes before their right of redemption expires. You as the buyer will receive your money back plus at a very hefty interest rate.

Ij O. · Answer

@Simon Campbell , thank you so much for the clarification.  I understand it better now.  I think for me it would be safer to go for ROE until am more experienced to deal with auction/forclosures.  Thanks again.  IJ

Ij O. · Answer

@Simon Campbell , if I am going to bid for a property at an auction whether at the court house, face to face or online auctions, would I have to do this title search with a title company before I bid?  If am making offer for a foreclosure through a realtor, am I responsible for the search or will the ROE realtor do all of that for me?  Thanks in advance.

Gautam Venkatesan · Answer

Get a title company to do a title search.

How do I find out if a property has liens or second mortgages

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