Quick Answer
Investors can spot potential ownership problems by comparing seller information with public records and asking key questions about marriage, divorce, death, trusts, LLCs, inheritance, prior transfers, and mortgages. A professional title examination is still necessary to confirm findings.
While a professional title search is the definitive way to uncover ownership problems, investors can identify potential warning signs early by asking the right questions and doing preliminary research.
Red Flags to Investigate
- Estate handled? If the seller inherited the property, was the estate properly probated and title transferred? See what happens when an owner dies.
- Ownership transferred after divorce? If the seller divorced, was the property awarded to the seller in the divorce decree and was the decree recorded?
- Which LLC? If the seller claims to act for an LLC, does the LLC actually own the property? See buying through an LLC.
- Lien released? If the seller says a prior mortgage was paid off, is there a recorded release? See what happens when a paid mortgage is never released.
- Name matches? Does the name on the contract match the name on the deed and other public records?
- All owners signing? If the property was transferred to multiple people, are all of them participating in the sale?
Property DNA as Early Research
For early property research before committing to a purchase, consider a Property DNA Report. Property DNA is an informational property-research resource that can help identify potential issues early. It does not replace a professional title search, title examination, title commitment, title insurance policy, survey, appraisal, inspection, or legal opinion. Always obtain a professional title search and commitment as part of the closing process.