Title Search for Investors – Part 2

April 23, 2011

This is a continuation of the Title Search 101 for Investors series. If you have not read Part 1 of this title search , just refer to the link so that you can better follow along.

The number two oddity in title searching is that most people whether buyers, sellers, investors, Realtors®, lenders, and appraisers think of a particular property by its street address or tax parcel number. In the title industry street addresses and tax parcel numbers are for the most part irrelevant. A title searcher is only concerned with a “legal description.” A typical legal description would be something along the lines of Lot 5, Block 27, Happy Acres Subdivision, as recorded in Plat Book 22, Pages 31 through 35, of the public records of Sunshine County, Florida. Now that’s a mouthful. The difference between a street address and a legal description is that a street address is an arbitrary number and name typically assigned by the post office or city hall. That address is subject to change for instance if a building gets bulldozed or a piece of acreage gets subdivided. A legal description on the other hand has defined boundaries. You can find a subdivision plat map filed at the courthouse and determine the exact lot dimensions and corner markers of any lot shown on it. There are not boundary line disputes with a legal description. The boundaries are what they are. But there could very well be a dispute if all you had were the street address or tax parcel number. After all was the fence actually placed along the boundary line or is it a few inches or feet off? The legal description of any given property will be either (1) determined by the deed on record at the courthouse, or (2) on parcels to be developed or subdivided determined by a licensed surveyor. Below is an example of a recorded plat map.

Plat Map

If you keep these two points in mind (1) the title search starts from today and works backwards through time and (2) you use the legal description and not the address, then you are half way there. So how do you get started with your title search? The simplest way is to go online to the county property appraiser’s website and see who they claim is the current owner of the property. (For your convenience on our Sand Dollar Realty Group website www.SDRhouses.com, we do have an extensive “Helpful Links” page that has references to all of the property appraiser, recorder, and courthouse search sites in Central Florida.)

Orange county property appraiser

Unless the owner of a property bought it prior to the 1970’s to early 1980’s, the property appraiser site will typically reference the book and page number stamped on the deed when they bought it. This book and page is the official records’ reference number for where you can find an actual copy of the deed. The deed you are looking for will have the abbreviation WD (warranty deed) or SWD (special warranty deed) and you want the sales price listed on the appraiser’s site for this deed to be a legitimate price (not $100). There are many other types of deeds including PRD (personal representative or probate deed), CT (certificate of title for a foreclosure auction), and QCD (quit-claim deed). But you want to find the most recent deed with either a WD or SWD abbreviation that has a legitimate price on it. This deed will almost always have been prepared by a title company as part of a normal arm’s length closing where the buyer was provided title insurance. This deed is where your quickie title search begins.

In the next articles, I will share with you the secondary steps you must take to evaluate various deeds in the “chain of title” as well as mortgages, liens, and foreclosure cases. Stay tuned …


Title Search 101 for Investors – Part 1

April 20, 2011

Many people do not know that in a prior life before I was a full-time investor and real estate broker, that I spent 9 years examining real property titles. I researched titles for thousands of homes and condos in Central Florida and eventually graduated into commercial title examination by researching the titles for the Orlando Naval Training Center (now known as the community of Baldwin Park) and about every hotel on International Drive that you can imagine. This gave me a strong background on what title problems to look for as well as how to creatively solve them. Prior to the huge expansion of online public records, we used to dig through microfiche slides, handwritten grantor/grantee books, and paper courthouse files.

Things are quite a bit different now that just about every county in Florida has their official records and court dockets available online often with images of the documents right at your fingertips. A detailed primer on title searching and examination could take up a hundred or more pages. A title examiner needs to know how to tell if a court proceeding including foreclosure, probate, divorce, bankruptcy, quiet title, etc. is handled properly. You need to know the statute of limitations for a dozen different liens and a whole array of various title defects. You need to look out for errors in documents as well as forgeries and fraud. On top of that the state and federal laws affecting real estate are constantly changing.

This series of articles is going to give you the “Reader’s Digest” version of how to quickly do your own title searches so that you can evaluate the situation with a property. Typically an investor wants to know who owns the property, possibly how big the lot is, and what mortgages or liens are outstanding. With the case of foreclosure auction investors, you will also want to know that you are buying the 1st mortgage and not a 2nd mortgage as well as verify that junior lienholders were named in the foreclosure suit. But you do not want to spend $100-200 on a title search unless you actually decide to buy the property. This set of articles will allow you to quickly shortcut that process. Of course it is still wise to obtain title insurance and a boundary survey for every property you buy anyway. Because despite what you may have heard, title companies do pay out insurance claims on a regular basis and sometimes correcting a title defect can be a long and drawn out process.

There are two oddities to title searching that most people do not realize. Number one is that searching a title is a backwards sort of process. With most any other type of research, you would start at the beginning and work your way to the end. Title searching is the opposite. You start at the end and work your way backwards through time. The reason for this is that you normally know who the current owner of the property is but you do not know who the original owner was. (Technically the original owner of all land in Florida was the Spanish Empire until 1821 when the United States acquired Florida from Spain. Spain traded it back and forth with England during the 1700’s but they originally acquired Florida by conquest in 1513 when good old Ponce De Leon landed in Saint Augustine. Enough of the history lesson though.)

The number two oddity is that most people whether buyers, sellers, investors, Realtors®, lenders, and appraisers think of a particular property by its street address or tax parcel number. In the title industry street addresses and tax parcel numbers are for the most part irrelevant. A title searcher is only concerned with a “legal description.” A typical legal description would be something along the lines of Lot 5, Block 27, Happy Acres Subdivision, as recorded in Plat Book 22, Pages 31 through 35, of the public records of Sunshine County, Florida. Now that’s a mouthful. The difference between a street address and a legal description is that a street address is an arbitrary number and name typically assigned by the post office or city hall. That address is subject to change for instance if a building gets bulldozed or a piece of acreage gets subdivided. A legal description on the other hand has defined boundaries. You can find a subdivision plat filed at the courthouse and determine the exact lot dimensions and corner markers of any lot shown on it. There are not boundary line disputes with a legal description. The boundaries are what they are. But there could very well be a dispute if all you had were the street address or tax parcel number. After all was the fence actually placed along the boundary line or is it a few inches or feet off? The legal description of any given property will be either (1) determined by the deed on record at the courthouse, or (2) on parcels to be developed or subdivided determined by a licensed surveyor.

If you keep those two points in mind (1) the title search starts from today and works backwards through time and (2) you use the legal description and not the address, then you are half way there. So how do you get started with your title search? The simplest way is to go online to the county property appraiser’s website and see who they claim is the current owner of the property. (For your convenience on our Sand Dollar Realty Group website www.SDRhouses.com, we do have an extensive “Helpful Links” page that has references to all of the property appraiser, recorder, and courthouse search sites in Central Florida.)

Unless the owner of a property bought it prior to the 1970’s to early 1980’s, the property appraiser site will typically reference the book and page number stamped on the deed when they bought it. This book and page is the official records’ reference number for where you can find an actual copy of the deed. The deed you are looking for will have the abbreviation WD (warranty deed) or SWD (special warranty deed) and you want the sales price listed on the appraiser’s site for this deed to be a legitimate price (not $100). There are many other types of deeds including PRD (personal representative or probate deed), CT (certificate of title for a foreclosure auction), and QCD (quit-claim deed). But you want to find the most recent deed with either a WD or SWD abbreviation that has a legitimate price on it. This deed will almost always have been prepared by a title company as part of a normal arm’s length closing where the buyer was provided title insurance. This deed is where your quickie title search begins.

In the next article, I will share with you the secondary steps you must take to evaluate various deeds in the “chain of title” as well as mortgages, liens, and foreclosure cases. Stay tuned …


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