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.) Stay tuned for Part 2 ... Title Search 101 for Investors - Part 2
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