- [Seth] Hey everybody, this is Seth from LandTipster.com.
How's it going?
Today, I'm just going to show you a really quick overview
of how to do a title search.
Now before we get into this, I just want to explain
to everybody, when you do your own title search,
you have to know a thing or two.
It's not, I wouldn't really recommend this
if this is the first land deal you are ever doing.
If this is just your first time dipping your toe
in the water, I would strongly suggest doing your
first or second deal through a title company and
getting an actual, full-blown title insurance policy.
Because, as you're gonna see in a couple of minutes
as I go through this, there's actually a lot of ins and outs
and random things you have to know and you have to have
a really good eye and kind of an analytical mind in order
to successfully do your own title search, and really
know what to look for and spot problems and things that
are going to be an issue.
So, the whole idea of a title search, really the
whole point of this is just, you want to make sure
that the person you're buying this property from
actually owns the property.
There's nothing that we call a break in the chain of title.
And a break in the chain of title is when, you know,
over the years and years and decades and centuries
that a property changes hands from one owner to the next,
there has to be a very clear distinction, you know.
Person A sold it to person B, person B sold to person C,
person C sold to person D.
Not any skips or issues where you see the deed
for person A to person B and then it skips a bunch
of people and then all of a sudden you see this
random person E selling to person F.
You want to be able to clearly understand what is
happening over the years as a property changes hands.
And that is really what a title search is, in essence.
There's definitely others things that can come up,
other issues that can jump out at you,
if you're looking for them.
Things like finding mortgages that you
didn't know were there, or liens on the property.
But, really just basic overview that's what
you're trying to do.
Just to give you an example, if you order your own
title search from an abstractor, or a title company,
usually this is what you're gonna see.
And what they'll do is, they'll scan in all of the
relevant deeds and recorded documents that are
either outstanding, or anything like that, over the
past 40 years.
And you can tell them to go further back in time,
if you want, but the typical approach is 40 years.
And that's usually what you'll end up getting.
So this is just one of many properties that I have
bought over the years.
And when I ordered a title search for this,
this is what I got.
It was this, basically just long pdf document,
actually I shouldn't say it was long,
it was only four pages.
But it's really just all of the deeds that changed
hands over the past 40 years.
And the reason there's only four pages is because
over the past 40 years there weren't that many transfers.
It was a relatively simple deal.
But, this right here, is the oldest deed of record,
not of record, but within the past 40 years.
And as you can see, it was sold from a
Charlevoix Land Company, seen right there to
American Central Corporation.
So basically what happened here was this company here
bought a ton of land in Michigan and they sold
a huge chunk of it, like dozens of parcels,
to this other company.
It actually kinda happens fairly often.
I've seen this, it's a pretty common thing
that happened back in the day.
As you can see here, in the legal description of
the property they just list
all these different lot numbers.
That basically means that they sold a lot of properties
from one company to another.
Okay, that's fine.
Now, if we were really looking closely.
If we knew exactly which lot number ours was,
we would find it in here and verify, Okay yes,
this particular lot was sold from this company
to this company and that's why it's listed on here.
Now going on to the next one.
This right here is when our particular property
in question was sold from the big, massive land company
to these people here, Thomas and Lois Weir,
husband and wife.
And this happened back in 1973,
as you can see right there.
Good, you know, that's good to know.
As a matter of fact, Thomas Weir is the person
that we ended up buying this property from.
Right there you can track that American Central Corporation,
who is the buyer on the previous transaction, they're now
selling it to Thomas and Lois Weir.
So good, everything's still tracking.
Now you go to the next most recent deed and you see
that Thomas and Lois Weir, husband and wife, are
transferring the property to the name of their trust.
So the Thomas E Weir and Lois M Weir Trust.
That's okay, that's all good, 'cause as long as
Thomas E Weir, the seller's here are the same as
the buyers in the previous deed, we should be all set.
And really, this is what you would call a clear
chain of title.
Notice how, as we went through here there were no
mortgages that popped up.
There were no liens, you know.
There were no outstanding tax forfeitures
or anything like that.
It was just one deed after another and we were able
to track from seller to buyer to seller to buyer.
So, this is what you want to see and, particularly, whenever
you get a lead or a call or you're working with a seller
who's trying to sell their property to you, if you're
doing your own title search, this is what you want
to make sure you're seeing, is that the person
that you're talking to is the person actually listed
on this deed.
I can't tell you how many times I've run across issues
where if Thomas had died, and for whatever reason their
son or daughter, or heir of some sort, picked up the tax
bill and had this idea that they suddenly owned
the property just because they started paying the taxes.
Well, it doesn't work that way, it has to legally
transfer from Thomas and Lois to
whoever is gonna own it next.
And there needs to be evidence of that in this title search.
So, that's just definitely something
you'll want to make sure of.
In that instance, for example, what you would
want to see is a copy of the death certificate
of these two people and letters of authority.
Now letters of authority grant basically another
person the authority to sell this property on
their behalf after they die.
So that's just one example.
I mean, you can't just have somebody come up
to you and say Hey, I want to sell you this
property when they're not listed on the deed.
There has to be some kind of explanation there.
And again, this is the kind of thing, if this
is your first or second title search, I don't
expect you to know all this stuff.
I certainly didn't when I started doing this.
I really had to kind of figure it out myself and
ask a lot of questions.
Maybe one thing that you could do, I mean
get your own title insurance policy and ask them
to walk you through the change of title and
explain to you why it's okay.
And they can do that for you too, and they'll
basically go through the chain of title just kinda
like I did right here.
If you ever do find issues that you can't answer and
if it appears that there truly is a problem, in
those cases, I know it's hard to say this,
but I would suggest you walk away from the deal.
Because the last thing you want to do is end up
with a property that you don't really own because
the person you bought it from didn't really own it.
I mean, that's just, nobody wants that to happen.
It's just something you'll definitely want to
watch out for and, again, that is why when I'm
doing my own title searches, the only reason I
ever do them, is when there's a property that is
just really, really cheap.
As you can see, for example, this property here,
back in, well, it's a little bit different because
they're selling it to their trust, but it actually
happens frequently when I'm working with cheap properties,
where I'll see them sold for $100 or $300
or really, really low prices.
And those are the kind of properties when you can
buy them for $100 and sell them for $3,000, just
kinda little rinky dink things to make a couple
of grand here and there, those are the kind of
properties where you typically want
to do your own title search.
And I only say that because the cost of a title
search is usually somewhere in the neighborhood of
$100, depending on who you go to.
And, I mean, the cost, of a title insurance policy
and to have a title company close on the deal, that
can be another $500.
When you only have a profit margin of $1,000 or
$2,000, I totally understand the desire to keep those
extra costs out of there, and doing your own title
search is one way to do that.
Another way you could do this is to actually
go to the county recorders office, or the
registrar of deeds, and actually ask to pull these
documents up yourself.
That is going to be the ultra cheap way to go, however,
to do that you actually have to go down there and do it
yourself and it takes time.
Depending on the situation, you're just gonna have to
assess whether or not you're comfortable doing this
on your own, how much you're willing to pay, or not pay.
I can tell you one thing for myself, doing these
title searches over the years, it is really, really
helped to understand how title work works.
Because I can really figure out when is there an issue,
why is it an issue.
Just for my own knowledge, it has just been a really
beneficial thing to understand
how to research a property's title.
There's definitely something to be said for that as well.
There's really a lot to be covered here and I
realize this is a relatively short video considering
how many things there are to know about a title search,
but if you do decide to tackle this on your own, those
are the basic things you're gonna wanna look for
and watch out for.
Thanks for watching and good luck.