why pay for title search if you are sure you are buy from the 1st loan and know the IRS lien amount?


#1

I understand that you are still responsible for IRS liens,? but assume you can find out what is the IRS lien amount and it is not a big amount, why do you still want to pay for title search?
Please advice.
Thanks.
?


#2

You are typically NOT responsible for IRS liens as long as they are junior, though the IRS would still have a 120 day right to buy the property back from you for the price you paid (redeem).
IRS liens are not the only thing a good title search can uncover. How can you be sure its a “first” without a search. Note that I have purchased foreclosures that everyone thought was a third, which wiped out what everyone else standing on the steps was a first. Pretty darn rare, but you do increase your risk by making assumptions.


#3

Sean,Thanks for the kindly reply. So does that mean I will have to run full title report on all the property I am interested? from another post, 3rd party will have to look at 22 properties before buying one at the auction, my title search cost alone would be 22 * $145? do you always run the full title report or just preliminary? some web site sell full title report for only $145, how trustworthy are those? or you just go for a local title company? Thanks again for you expert advice.


#4

That’s a great question and it really comes down to your tolerance for risk, and your ability to do your own research. For my investing I ran an in-house title plant that essentially did prelims (not as formal as the title co, but the same basic research), on 400-500 properties a month. I know other trustee auction buyers who rarely look at more than a property profile, though they fully understand the cost/risk tradeoff they are making. I don’t know of any auction buyers that actually buy pre’s on every property they might bid on. Math just doesn’t work at the typical prices for a pre - and remember those prices just get you the research, you still have no title insurance. ?