Expert: Dick Dennis - 5/19/2009

Question
Hi Again. I have a follow-up question regarding the auction of tax-defaulted properties. I am doing research on any liens/encumbrances that may be present on a property I am interested in. I tried calling a Title Company but they could not help me because the house is not in escrow (they could not provide a prelim). Where else can I look to see if there are any liens/encumbrances on a home for auction?

Also I did a search online and found many websites offering title search for a fee. Would there be any benefit of signing up for this service? What are the disadvantages of online title search?

Your help is greatly appreciated.
Thanks

Answer
The individual state governments have cracked down a bit on title companies, so the title companies now charge for their services unless you are a steady customer of theirs and/or (like you found out) are in the process of buying a property and have an open escrow. As for signing up for an online title search, it is up to you. How often do you intend using that service,etc.? As long as you do use that title company over and over again for transactions, you should have no problem. If it is your intent of buying houses behind in taxes, what you need to do is to go to the county tax collector and ask them how you can keep up to date with properties behind in their taxes. Chances are very good you will find that most of the properties that are indeed behind in taxes will be those properties for which most people have no use, like lots and acreage out in the boonies or desert and, yes, properties that haven't had a mortgage on them for virtually centuries. Otherwise, if you pin down a property or two, you can go to the recorder's office and check the big tombs they have for properties. Its rather interesting and time consuming. You might ask them if you are able to check their files online. Good luck.

Dick Dennis