Finding Out About Liens On A Property?
How do I go about finding all the liens a property may have against it?
There is a piece of property across the street from my brothers house that recently went up on the tax sale list and I want to know what other liens maybe on the title.
Thanks
Chris
A thorough due diligence assessment process removes uncertainty from key decisions that must be made when analyzing the cost/benefit of any real estate transaction. A comprehensive inquiry should be designed to provide a buyer with clear pictures of where their strategies and decisions are taking them, or to put it simply - what it is they are buying.
Even though the term "due diligence" may seem daunting, it can be defined simply as "the responsibilities of a person or business to exercise proper care and planning prior to making any business decision, or entering into any business venture."
There are a multitude of details which must be considered when dealing with purchasing a parcel of real estate. Many of these details are easily overlooked. The function of due diligence is to independently verify all representations made by a prospective seller as well as to uncover pertinent facts which have not been disclosed but which are important to the buyer.
After identifying a target property, due diligence starts during the contract negotiation stage. Unless the seller understands at the beginning of the process what document production and other information, will be required before the deal is closed, there is going to be automatic trouble in getting to the closing table. When a seller is presented with a thorough list of required due diligence items by a prospective purchaser, the seller can be overwhelmed. Many of the items that must be examined are personal and private, i.e., tax returns, and sellers are not usually comfortable with just "turning loose a box of documents."
Including a list of required due diligence items, therefore, is essential in the purchase agreement and it is expected that there will be some negotiation as to what will and will not make it to the final draft.
Beyond the physical condition of the property, there are a multitude of intangibles that have to be taken into account when evaluating a site for acquisition. Literally EVERY document concerning the land, building and its operation MUST be examined. This includes leases (with any and all extensions and modifications), notes and mortgages, (whether the buyers are assuming them or not), title policy, certificate of occupancy, ADA compliance, elevator maintenance contracts, tax history, licenses (in some jurisdictions), parking lot contracts, etc.
An evaluation of factors which an astute purchaser must consider includes:
(1) Cash flow projections;
(2) Appraisal, environmental and engineering reports;
(3) Sales and rental comparables;
(4) Market trends and property values; and
(5) Financing strategies and alternatives.
Liens are recorded. Check the county records or use a title company to search for you.