Foreclosure Title Search

When buying a foreclosure property most people do not understand where the auction price comes from.

The most important thing is how the property is happened to be in foreclosure. Usually, the reason is that current owner does not pay mortgage or tax bills in time. In that case, governing bodies put lien on the property. It means that government or mortgage lender will try to receive the payment on the current owner's obligations. The simplest way to get the money back is organizing an auction.

If current owner has only one lender, the property may be sold at the price of debt against the property. But other debts are also possible. For example, if current owner of the property has a home equity loan in addition to home mortgage. So, there may be several liens against the property from different mortgage lenders.

When buying a foreclosure property, title search is the first thing that must be made, because this is the way of assuring the buyer that the seller of the property has the legal right to sell it, the correct legal address and description of the property, and that there is nothing that interferes the buyer to own exactly what he wants to buy.

Public records give the details about history and previous owners of the property called the Chain of Titles. A tax search shows any charges against the land and also reveals if any real estate taxes are owed. Any unpaid property taxes are more important than all other registered liens. Buying a pre-foreclosure without knowledge of a tax lien, is a risk of loss of your investment unless you pay the debt.