"The first to record wins the race to the courthouse."

This saying has been around for awhile but it doesn't really hit home until you lose big bucks over it. Generally this doesn't happen in common transactions but in many foreclose cases and auctions this can happen where the title has not been searched fully and everything is done halfway.

My friend lost big when a title wasn't recorded and the proper title search was not done.

The lot was being sold at an auction at a community subdivision in California where the previous owner had not been paying their dues. My friend therefore purchased the property at a nice price in the auction and felt he had done well. Little did he know there was an auction going on simultaneously over a tax lien against the property.

A week later when the title company finally went to record the purchase, the other transaction had already been recorded! 

Who was to blame?
The property's title search was not done properly to uncover all liens against the title. If this was done the tax lien would have been discovered and dealt with. The agent representing the buyer did not do his due diligence in overseeing the transaction from the title search to the recording of the deed. 

So what happened?
The property went to the one who recorded first and my friend was left out to dry with no restitution. In consulting an attorney on what course of action to take the attorney recommended filing suit against the selling agent. The suit is pending.

The lesson we can learn if we are dealing in these sort of transactions as agents or investors is we can't expect people to do their job! We have to make sure they do it. Follow up and make sure the title company has completed the recording quickly.