Understanding property title report

[Zaher Aldik]

Hello !

I am excited to  join this awesome forum, I have 6 rentals but I am newbie to auction business, I have been doing lots of research so I realized the importance of pulling title report before bidding, I paid a Title company to search it for me but the problem I am not sure if I understood it, in the Unreleased mortgage section, the report said there are 2 mortgages, one in 2014 for $143256,  and another one in 2018 for about $36834, can I ask what does it mean ? 

 Thank you ! 

[Zaher Aldik]

Quote from @Kevin Sobilo:

@Zaher Aldik, I recommend developing a relationship with a law office that specializes in real estate. If you have them do the title search, you can then ask them follow-up questions. The simplest question to ask "If I buy at the auction, will the title be clear, marketable, and insurable? If not, what issues will I need to resolve and how do I resolve them?".

Title reports are only as good as whoever created the report. There are MANY things that can affect title and sometimes things are missed.

If for example you are buying properties at tax auction some common issues are estate taxes and owners/heirs not notified correctly. Many properties end up at tax auction because the owner died and nobody took control of the property or estate. Since the property automatically was inherited by someone estate taxes were due but likely unpaid on the value of the home to the state. Those taxes attach to the title of the property and are not wiped away at tax auction. So, you need to pay those to clear the title up.

Owners/heirs not notified correctly. Many times its difficult to find the property address or in some cases serve people in person as required by state law. If not done perfectly, that person could claim the sale was improper and that they still have an interest in the property. So, a common solution is to pay a lawyer to perform a quiet title action which takes several months.

Since there are many things that can affect title tax and sheriffs auctions are not well suited for a novice investor and if someone not familiar with all of this wants to buy they should do it with the support of a lawyer who specializes in real estate because they may need that lawyer to do some follow-up work to clear up title issues after purchase. 

 Sounds very reasonable, I` ll talk to real estate lawyer on Monday, thank you so much Kevin!