Sometimes, with smaller land deals, it’s not worth the cost of using a title company to close the deal. In this case, you may consider self-closing the deal as we discussed last week. In this episode, I discuss how to do a title search on a property – one of the crucial steps in getting a deal under contract. I break down what exactly a title search is and why you need to do one. You’ll also find out what to look for once you’ve pulled up the information. It is important that you understand this process so that you can save time and money!
This podcast was recorded as part of our Winning Wednesday live series. Every Wednesday at 10AM PST on the Land Profit Generator Real Estate Investing Facebook Group, I answer your questions and delve deep into real topics that affect land flipping business owners.
What Is A Lien?
To understand liens, you first need to understand mortgages. A mortgage is a personal loan using a property as collateral. So, if someone defaults on the loan, the bank goes after them. The bank was willing to give them that loan because they had an asset that they could put a lien against. The lien gives the bank the right to take the property away from them if they don’t pay the loan.
Therefore, when you do a title search, you want to search for the person. You are looking for any liens that the person has signed and find out any of them affect the property you want to put under contract.
You need this information to make an informed decision about a land parcel.
How To Do A Title Search (And What To Look For)
Firstly, let’s discuss how to do a title search. Go the website of the county that the property is in. Look for the recorder’s office (sometimes called the clerk’s office). From here you can then search for the owner of your property. You will likely find multiple people with the same name, so you will have to read through these until you find the right person. This is possible in almost every state, except California due to privacy laws. In this case, you’d need a 3rd party title service.
The main thing you need to look for is – are there any liens or notes against your seller? And, have these been paid off for the land parcel you want to flip? Remember: a lien is only open if it hasn’t already been removed.
If you do find an open lien on the property, don’t panic! The very first thing you should do is discuss this with your seller. You should be able to come to an arrangement that suits both of you.
- Find out how about liens
- Learn how to do your own title search
- Understand what to look for when you do a title search