Preventing Deed Fraud: Twice-Sold Property

13 Replies

How can a buyer protect themselves from a seller who sells a property twice?

Recording a deed is not required by law, so a seller can write two deeds for the same property to two separate buyers, collect the money, and disappear.  Even if the deeds are recorded, there is a time lag to record them.

Is there a way to check for deeds that are not recorded with the clerk?

Ok.  Looks like checking property records at the clerk's office and recording your deed ASAP are the main mitigation.

I suppose it would help to have a time window in the escrow agreement to let the dust settle bit after the deed is filed.

The risk is still there.  Property deed fraud is a criminal offense, so as long as the seller has net worth to lose, that should be a good discouragement too.

Originally posted by @Nazar Trilisky :

Ok.  Looks like checking property records at the clerk's office and recording your deed ASAP are the main mitigation.

I suppose it would help to have a time window in the escrow agreement to let the dust settle bit after the deed is filed.

The risk is still there.  Property deed fraud is a criminal offense, so as long as the seller has net worth to lose, that should be a good discouragement too.

If you have Title Insurance and close through Escrow the risk is the Title Company's, not yours.

If you are using Quit Claim Deeds and doing the recording yourself (highly Not recommended) then you are taking the risk upon yourself. Don't do it that way.

 

Ok.  Traditional route of purchase (contract, inspection, title check, escrow, ...) protects the buyer with title insurance.

When buying a foreclosure at an auction, the seller's honesty is less of a concern because it's likely an established bank.  You just have to insure the property and buy title insurance as soon as you finalize your winning bid.  Real estate companies that bid at auctions for you usually do a title search, but I don't know if they provide any guarantees or title insurance.

How do you folks who buy foreclosures ensure a clean title?  Doing a full title search on each property you bid on can be costly.  Scanning publicly-available deeds yourself may not be reliable enough.

Originally posted by @Nazar Trilisky :
Ok.  Traditional route of purchase (contract, inspection, title check, escrow, ...) protects the buyer with title insurance.

When buying a foreclosure at an auction, the seller's honesty is less of a concern because it's likely an established bank.  You just have to insure the property and buy title insurance as soon as you finalize your winning bid.  Real estate companies that bid at auctions for you usually do a title search, but I don't know if they provide any guarantees or title insurance.

How do you folks who buy foreclosures ensure a clean title?  Doing a full title search on each property you bid on can be costly.  Scanning publicly-available deeds yourself may not be reliable enough.

 Those questions are "State Specific". Foreclosure law varies by state.

Always use a title company to aid in the title and escrow process! If you are interested in checking the title of a prospective foreclosure purchase, you can check with the county assessor website or visit the courthouse regarding the property.

Originally posted by @Nazar Trilisky:
Ok.  Traditional route of purchase (contract, inspection, title check, escrow, ...) protects the buyer with title insurance.

When buying a foreclosure at an auction, the seller's honesty is less of a concern because it's likely an established bank.  You just have to insure the property and buy title insurance as soon as you finalize your winning bid.  Real estate companies that bid at auctions for you usually do a title search, but I don't know if they provide any guarantees or title insurance.

How do you folks who buy foreclosures ensure a clean title?  Doing a full title search on each property you bid on can be costly.  Scanning publicly-available deeds yourself may not be reliable enough.


 

>How do you folks who buy foreclosures ensure a clean title? Doing a full title search on each property you bid on can be costly

Network and use the entity that does the check and you may be able to get it done for free. We do not get charged to have someone check the title for us. Of course, if we purchase we do what we can to make sure they get the corresponding business. win-win.

As you network and make contacts you may find many things that you can get charged for are free. Independent comps, skip trace owners in small volume, title checks, etc. It is important that if someone performs these types of services for you that you use them when you buy/sell RE.

Good luck

@Dan Heuschele , if you are buying from the bank who already foreclosed, then clear title should be part of the contract and if they cannot convey clear title, then you can cancel. 

I am not sure about out-of-state, but you can easily call a title companies' customer service for a lien/judgment check if you wanted...but again, clear title is part of the seller's responsibility, even in REO deals.

Originally posted by @Shannon Wright:

@Dan Heuschele, if you are buying from the bank who already foreclosed, then clear title should be part of the contract and if they cannot convey clear title, then you can cancel. 

I am not sure about out-of-state, but you can easily call a title companies' customer service for a lien/judgment check if you wanted...but again, clear title is part of the seller's responsibility, even in REO deals.


 

How about CA tax lien sales? This is where I have gotten contacts to check the title for me (without charge).

Thanks