How to make sure of clean title before bidding at online auction

Question

I am interested in bidding on property at an online website. Im trying to make sure the title of the property i want is clean. It is an akron OH, summit county. How can I research this information online so I can safely bid?

It says I can get title insurance but Im not sure that protects me from a big tax lien, does it?

Do I just have to pay a title company to do the research?

Thanks a lot!

This goes for xome.com, auction.com, or hubzu.com

Ned Carey · Answer

@Joe Ebanks

You are right. You shouldn't  pay $150 for a title search. No one would for an auction.

The contract rules. If it says you get free and clear title, that is what you get. If it  doesn't say that, then you may be responsible for other bills. That is a risk I wouldn't take.  Any good auctioneer should allow you to see the contract. In lieu of seeing that actual contract in advance of an auction, the written terms of the auction would generally suffice.

Yes you should get title insurance. Generally that is what you get when a contract says "Marketable title".  But as Wayne brooks says the title insurance could have exceptions. What is your protection against exceptions to the title insurance - The contract.

Again read the contract, you want language similar to "Free and clear marketable title."  What anyone else says doesn't matter. What matters is the specific contract you sign. It is worth taking some time to learn contract language. I didn't learn it here. I learned it reading law books. Also real estate agent classes would be a good primer on contract law.

I would consider learning to understand terms and conditions of sale and contracts to be first. Once you learn that then you can start to learn more about researching titles.

Joe Ebanks · Answer

@Ned Carey Much appreciated Ned Thank you

Joe Ebanks · Answer

@Ned Carey Thank you Ned, I appreciate the answer. I am certainly not trained. I have contacted title companies and lawyers and they would charge me about 150$ per house that I want to check.

What do you suggest for me to do? I am trying to go around to the sheriff sales in my area and purchase properties here. But I havent done it before. It will get expensive real fast to get title searches on every single piece of property i am looking at. I was hoping to figure out how to do it myself.

I also would like to be able to bid on the online auctions. From what I understand as long as I get title insurance I will be fine if I am the winning bidder. However I did just find a property i wanted to bid on and I looked at the title and it says 6,000$ lien. In this case I wonder if I will have to pay for it to get a clean title? Or if the title company will not insure the title as it has the lien? I really dont know what will happen..

Much appreciated...

Ned Carey · Answer

You need to look at the contract or other terms. The terms should tell you if you are buying "Free and clear of all liens and  encumbrances" or similar language.  If those are the terms that is what you get or you can walk.

If you don't see that then don't bid. If you do see that there is no need to do the research.

Unless you are already trained in searching titles, you cannot do it yourself even with the right sites. A full title search is not just a check of the land records it is also bankruptcy, judgement, municipal lien, IRS lien, etc. search. You check all of these things and possibly others.

Joe Ebanks · Answer

So I see Ill recieve a special warranty deed.

By my understanding if there are liens or encumbrances before the seller owned the property, I will be the one to have to pay those. I havent been able to find out where I can find this information! The property is in summit county ohio.

Also this part of the purchase and sale contract is confusing and worries me...

"closing is further subject to each of the following conditions precedent (the failure of which shall not, in and of itself, relieve any party of its obligations set forth in Section 6F1  below.....

(4) The title insurance company identified in Section 1 above shall have irrevocably committed to issue to buyer an owners policy showing coverage in the amount of the purchase price and showing insurable title to the property vested as stated in section 1 above, subject to any and/or all of the following if applicable (THE FAILURE OF WHIH SHALL NOT BE DEEMED A DEFAULT OF SELLER)

1 - the title companies standard exceptions

2 - the following encumbrances or other matters:

(i) liens for all current ageneral and special real property taxes and assessments not yet due and payable;

Theres a lot more to it but that specific part kind of worried me. Is it possible I buy the property, then come to find there is 20,000$ worth of liens on it, then a title company decides not to insure it, and I am forced to buy the property as it is?? Or am I just over worrying here...

Much appreciated!! Those with experience purchasing bank owned properties on XOME or similar sites i would love to hear from you

Joe Ebanks · Answer

@Wayne Brooks thanks a lot sir! great to know

Wayne Brooks · Answer

If title insurance is offered, that means they are paying off any current liens/taxes.  Do get your own title insurance though instead of the title insurance offered for free....sometimes they load up the exclusions in the B section exclusions for unrecorded code violations, etc.

How to make sure of clean title before bidding at online auction

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