title search

i’m doing my own title searches and concerned about trust deeds that might have been assumed and not repaid by previous owners. is there a quick way to tell if this is so, or do i have to go back in the property history to the beginning of time? Thanks.

You would be looking for the reconveyance on any Deed of Trust. You can look at a transaction history and see the lender name and loan balance as a screening process. A new lender would not lend behind another loan that is similar in loan balance unless the value of the property would support both loans. If you are in doubt then you would want to verify it was paid off by tracking the reconveyance. It is also important to note that occasionally mistakes are made so you need to do the research necessary to satisfy yourself that all other loans are paid off. One of the biggest sources of title issues affecting investors are un-reconveyed Helocs (home equity lines of credit). If these loans are not paid off and reconveyed the borrower could have the ability to draw on that loan. If you see a Heloc you would absolutely want to confirm that this loan was reconveyed even if it was from the previous owner.

Most title researchers also pay attention to whether or not the last transfer was handled by a title company and whether or not it was for “full value” which would indicate that past loans have been paid off. Look at some grant deeds upon sale and you’ll get a feel for this.

One more thing… note that title insurance exists for a reason. Even if you go back to the beginning of time and are super thorough its quite possible you’ll miss something due to a variety of reasons. You will always be taking some degree of risk when buying without title insurance.