In today's real estate market, obtaining a clear tax title can be a concern for investors buying distressed property. Here are some valuable items of information concerning this certification.
Individuals who are investors in the real estate market may have some concerns about obtaining a clear tax title. Because of the downturn in the real estate market investors are flocking to purchase these distressed properties through certificates,
liens and foreclosures. Often the clearing of titles becomes more challenging than with traditional property sales. If a buyer purchases deeds, for example, he or she would typically have to hire an attorney to file paperwork with the courts in order to obtain legally cleared titles. Engaging an attorney will cost several thousands of dollars and take up to a year to finalize the process. There are now title certification processes that companies provide that can streamline this process.
Today Market
A few years back, real estate property sales went into an accelerated phase known as a "bubble." During the bubble, home values grew by leaps and bounds almost daily. Homeowners felt rich and tapped their equity for accessing extra cash. They bought bigger and better houses with their amazing profits from their existing house's sale. Banks loaned money for housing with no down payments and a variety of hybrid, creative financing techniques. Unfortunately, this was basically a house of cards that eventually collapsed, leaving foreclosures, underwater mortgages, and properties often worth less than half their values of a few years back. Due to this popped bubble, delinquent taxes and foreclosures are everywhere and investors who have the cash to step in, can make healthy profits.
Delinquent Property Taxes
Homeowners are required to pay their property taxes either once or twice a year, usually October and March. If a mortgage is held on the property, the mortgage company usually collects PITI meaning payments including taxes and insurance. It's the mortgage holder's responsibility to pay the county treasurer the taxes on the property. If the house has been paid for and is owned outright, it will be the homeowners' responsibility to pay the taxes. If loans have gone into foreclosure, not only will the loan end up in default, the property taxation monies won't be current, either. Homeowners are notified of payments due, delinquencies and fines that are accumulating.
Auctions, Liens and Titles
Investors may profit from these troubled housing situations in a variety of ways. They may purchase distressed homes, lots, condominiums or townhomes at auctions for foreclosures, for delinquent taxes or they may purchase liens against the tardy payments. If, after a specific amount of time, the late payments and fines aren't brought current, the investor can sell them. In order to maximize the sales potential, he or she would have to obtain a clear title. Traditionally this is done by engaging a law firm for a substantial sum of money or going through a certification process that is less cumbersome in time and cost.
Investors who are interested in building wealth in a different manner than yesteryear may be interested in putting their real estate dollars toward liens, auctioned properties and in clearing titles through a lawyer, court process or by selecting a company that uses a streamlined title certification process instead. During these troubled economic times, there are still ways to build one's financial investment portfolio with a bit of creativity, research and due diligence.
