Title search method

[Mark Forest]

I often read here that one must be sure he has the "first lein position" and "be sure of the title work" etc. I went to the county court house to look at their online title listings, and I must admit I just did not know what I was looking at. I could tell there were others there from law offices that knew what they were doing, but I certainly was not one of them. The problem is you have to pay by the minute you are on there.

How did you all learn this?

[Jon Holdman]

The basic idea is that you want to find out all the liens and encumbrances against the property. Unfortunately, these county systems are all different. At least, I've never encountered two that are alike. So, you're going to have to ask someone at your county for help in the mechanics of how it works.

There should be some means of finding every document that's related to a specific property. Some systems are quite easy you use and you can put in an address and find this info. Unfortuantely, an address is the least useful designation for a piece of property. More useful is a "legal description". Those vary from place to place, too. Typically they're something like "lot 4 and 5, block 14, or the 3rd addition to bluebell subdivision". Some areas, typically more rural areas, will use a "meets and bounds" survey that says "starting at the SW corner of the NW quarter section of section 14, township 3, range 5, north 100', then north 93 degrees west 300', blah de blah". You may have to figure out how to get from an address to the legal description. It will be on a deed, but you may not have that.

Most commonly, county's use an "assessor's parcel number" or something like that. Again, you may have to jump through hoops to get from an address or legal description to a parcel number.

Once you have the parcel number, you should be able to pull up a list of documents.

"Deeds", which might be "warranty deed", "general warranty deed", "special warranty deed", "quit claim deed", or various other names show changes in ownership. The "grantor" is the one who is giving up ownership and the "grantee" is the one getting ownership. The most recent deed for the property shows current ownership.

Mortgages or "deeds of trust" show where a security interest has been given in the property, usually as a result of a loan. A deed of trust is NOT a deed, and does not convey ownership. On these, the grantor is the borrower and the grantee is the lender.

A "release of lien", "release of deed of trust" or something similar cancels out a mortgage or deed of trust. That's filed when the mortgage is paid off.

There can be multiple mortgages outstanding at the same time.

Many different types of liens may be placed on a property by various entities. Mechanics liens are placed by a contractor who didn't get paid. The IRS can lien a property. An HOA can lien a property. A legal judgment can result in a lien being placed on a property.

The general rules is "first in time, first in line". The lien or mortgage that is oldest is the "senior" lien, and gets first priority in a foreclosure. Other liens are "junior" and take second, third, etc. priority. Certain entities can place more senior liens, even with other liens in place. HOA's, for example, here in CO, can place a small amount of outstanding dues ahead of any mortgage. I think the IRS can create a senior lien, not sure.

When a foreclosure officially starts, a "lis pendens" or "notice of demand" or some such is created and recorded. You should see that in the document list. Eventually it may be withdrawn, or the property may go to auction. If it goes to auction, there may be a "trustees deed" or "sheriff's deed" or some such created.

This is a bit of a dangerous thing to be doing on your own. Title companies are the real ones that do this job, and they charge for doing it.

Many county's in here have online systems that are no charge to search. You should check if your county has such a system. Other nearby counties might. Like I say, I've never found two that are alike. If you can find a free one, try futzing around with it until you're more comfortable. They pay to use the one you really want to use.

Keep in mind they're not always 100% up-to-date. It can take time for documents to be entered, so very recent filings may not be in the system.