Finding one of these red flags doesn’t mean the deal is dead. You should speak with the seller and see what they are willing to do to resolve title issues.
Prospective home buyers should check public property records for undisclosed problems before closing a deal. Surprises like hidden liens can quickly transform one of life’s most exciting purchases into a financial nightmare. Learning where and what records to search will help buyers protect themselves and improve their negotiating and decision-making power.
Red Flags to Watch for in Public Property Records
Public records include all documents created by or submitted to government agencies. These records include title information, property judgments, tax documentation, and more.
A property history search provides an account of a title’s history and any financial or legal actions involving it. Some of the most important red flags to watch out for include:
Ownership Discrepancies
The simplest but most important fact to check is the current property owner. The sale must involve all names on the title record. Incomplete probate processes, joint property ownership, or inclusion in a trust can muddy ownership situations and cause delays or legal disputes.
In extreme cases, someone may be selling a property they do not own. This situation typically occurs with abandoned houses or within disaster areas.
Unresolved Liens or Outstanding Debts
Properties with an active line are considered “clouded titles.” This means that another entity has a secured interest in the property and is using it as collateral for unpaid debts. Typical liens come from delinquent property taxes and unpaid mortgages.
Records will specify whether a lien is active or resolved, allowing buyers to find concrete confirmation of a clean title. Buyers may also request that the seller purchase a title clearance service to deal with a clouded title as part of the negotiations.
Zoning Violations or Land Use Issues
Public records show all violations and additional uses for the property, confirming that it adheres to local zoning and land use regulations.
If the previous owner does not address these issues, then the new homeowner can be held responsible for the violation. Violations like overgrown grass, the presence of junk vehicles, or visible trash may incur fines or other penalties.
Homeowners who are aware of the violations after checking public records will know how to fix them quickly.
Inconsistent Property Descriptions
Many homeowners do not follow the proper procedures when performing home renovations or additions. These actions typically require permits, which are entered into the public record with the local office responsible for building inspections or development services.
Missing permits and reports of property modifications are big red flags. Prospective buyers should compare the public property description with the in-person tour, noting any discrepancies, such as an undeclared deck, an additional bathroom, or a pool.
It is also good to compare the public record’s reported lot size and square footage against what the seller describes.
Pending Litigation Involving the Property
Property disputes over boundaries, easements, or titles are recorded in local court records. In most cases, it is preferable to buy a different property rather than get dragged into an ongoing legal battle.
These restrictive covenants may change how homeowners can use a property. They may have to share parking areas, adjust landscaping, or remove an outdoor structure. The nature of the dispute may also indicate undesirable neighbors.
Title History Red Flags
Breaks in the chain of title, unexplained quitclaim deeds, or frequent ownership changes are cause for concern. These red flags may point to attempts to obscure the valid owner or construction problems.
Public title records can be organized by date, allowing homebuyers to analyze a property’s transfer history quickly.
How to Investigate and Address Red Flags in Property Records
Knowing what to look for is just the first step. Homebuyers must also know how to use the information in property records to decide whether to walk away from a sale or negotiate further.
Conduct a Thorough Public Records Search
Public property records are split between multiple government agencies. A comprehensive search will include the following offices:
- County Clerk or Recorder
- Land Development
- Tax Assessors
- Local Courts
Combined, these locations will provide information on the property’s chain of title, value assessment, physical description, modification history, and active litigation. Many counties offer free online searches, but physical copies will likely incur a fee.
Seek Professional Assistance
There can be dozens, even hundreds, of public records associated with a single property. This bulk can be overwhelming to individual buyers, so the search is often best left to a title company or legal professional.
Both services work hand-in-hand with buyers and sellers to ensure a clean title and prevent problems for either side.
A comprehensive search is also a requirement for buyers who are looking for a title insurance policy. This insurance protects homeowners in the event that the title search missed a potential problem and covers any resulting financial damages.
Take Preventive Steps Before Closing
Finding one of these red flags doesn’t mean the deal is dead. You should speak with the seller and see what they are willing to do to resolve title issues.
It is possible that they did not know about these problems and will handle them before closing. However, you should double-check that they followed through on every account and document the resolutions.
Enterprising homebuyers may also take the opportunity to negotiate a lower price. The problem may be as simple as a bit of yardwork to comply with zoning laws, while knocking thousands off the sales price.
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