Is a Title Company Really Necessary?

Is a Title Company Really Necessary?

Sure you can hire a title company to do a preliminary title search for you on the property that you are interested in buying. But I would NOT recommend it… because in most real estate investment cases where you have found a good price for a property either from an individual or from the Tax Lien or Tax Deed Sale, you don’t want to be paying for title searches on properties that you have no idea on whether or not you actually will be able to buy the property or not.

Instead you need to learn how to do a quick and preliminary check for red flags with the county. Of course the Title Companies want you to believe that you MUST have a professional title search done and that ONLY THEY can do that, …that what they do is complicated, important and that only they can do it the right way.

Although title companies have their place in the Real Estate world, I do think that in most cases you can do your own title work and it does not take that long to do!!! Whenever you act in the Tax Delinquent Property world, you DO want to make sure that what you invest in, has Marketable title, but in most cases you can determine this for yourself without necessarily paying for the help of a Title company.

If you decide you want do your own title search, you need to understand the basics of what constitutes a cloud on a title, and what represents a clean title chain. Once you understand that, you will be able to do what they do and save lots of money in the process.

The criteria of marketable title are the following:

– At time of closing and ownership transfer, there are no liens against the property

– The Chain of title is clean and without gaps.

So as long as they are no hidden liens against that property at time of closing and as long as the property changed hands in the past properly, leaving nobody out of the loop, any title company will insure the title to such a piece of land or home.

Many counties nowadays provide most of their information through excellent online databases, so you should be able to easily do your research even from the comfort of your own home. All you need is a computer and internet access. If the county does not provide this service, you sill can go down to the county offices and spend a couple of hours there doing that research. When you start out, I recommend doing this anyways, so that you can get familiar with the different departments and the way the county offices work.

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