Bid with Confidence. Buy our Expanded Title Report.
Based on our experience with completing thousands of title searches on properties in foreclosure, we know that nearly 70% have encumbrances besides the mortgage or lien being foreclosed on. Many of these will be extinguished by the foreclosure, but some will not. How do you know beforehand what you might be getting into?
Buying homes in foreclosure is a great way to participate in real estate investment or even enter homeownership affordably. There are risks around both the physical condition of the property as well as possible liens that might survive the foreclosure process. These risks are especially high when buying a foreclosure property at auction, as potential buyers cannot inspect the home prior to purchase nor demand clear title. However, by doing some research, the risks of auction buying can be minimized and you can take advantage of some great bargains. So how does a title search help?
Depending on the reason for the foreclosure, there are various types of liens that may survive foreclosure and become the responsibility of the new owner. These include second and third mortgages, judgment and tax liens. Knowing about these liens before auction will allow you to make an informed decision regarding what you are willing to pay for the property, or whether to stay completely clear of it. You may even be able to contact the lien holder prior to the auction and negotiate a settlement.
Information about liens and judgments are public information and can be found in the county government buildings. It is possible to search for these documents yourself, and there are resources on our site to help you learn how to do that including our exclusive Title Search Course. However, even with training and experience, title searching is a time consuming process that many investors would prefer not to undertake. The solution is to purchase a professionally abstracted title search report. Which is where we come in.
All TitleSearch.com Title Reports are designed to be easy to understand and we are happy to answer any questions you might have once you have received your completed report. For auction buyers we recommend purchasing our Expanded Title Search, since this search comes with copies of all open documents, giving you the best opportunity to review and deal with encumbrances prior to auction.
Check out the links at the top of this page, including our FAQs (many with videos) for tons of information about title searches. And for more on foreclosures and auctions, see our FAQ What About Foreclosure Property Auctions? along with our complete Foreclosures and Investing Video Series.