Before you buy real estate, mine the public records
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If the legal owner is not the same as the person with whom you are negotiating, and the owner has not given your contact written authority, get in touch with the owner directly. His name and address are also included on the master list.Skip to next paragraph
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Existing mortgage. Using the name of the owner and the coded date of purchase , consult the property owner's index. One of the code numbers will be the actual document number of the deed that gave the property to the present owner. Read that document closely, and inspect the documents recorded just before or just after it. Also, consult the name index for any later mortgages.
Mortgages are always recorded, so if there is one, you will find it.
Seller's original cost. The amount of tax stamps on the deed is supposed to be based on the price of the property. The counter employees will be able to tell you how to compute the apparent sale price from the amount of the stamps.
But be aware that people sometimes have excess stamps placed on the deed. Then if they later sell the property, they have an apparent basis for claiming they paid more for the property than they actually did.
Pending foreclosure. If the seller is seriously behind in his mortgage payments, the chances are that the lender will have recorded a document that says so. Sometimes called a notice of foreclosure, it will be found in the name index. Search the index to see if such a notice was filed. If so, the seller is likely to be quite eager to sell. He probably has a very limited time to come up with his delinquent payments.
If the money is not found, he will lose the property to the lender. Such a seller is likely to accept less for the property to ensure a quick sale.
Other properties. If the legal owner's name appears frequently in the name index, you can be sure you are dealing with a real estate veteran. On the other hand, your prospective investment may be the only property owned by the seller.
You may want to plan how you would negotiate with either kind of seller.
Sophisticated sellers. If the legal owner's name appears on one or more second or third trust deeds in the name index, or on wraparound loans and complicated leases, expect that the seller will know a lot about creative financing. See what you can deduce about the seller from his other transactions shown in the public records.
Assessed value. The county assessor must estimate how much the property is worth in order to compute the amount of property tax due. This estimate is usually at least a year old because the assessor's staff is too small to reassess each property each year, and it is usually lower than the market value.
In some states, the assessed value is set by law to the last purchase price and then adjusted by a fixed percentage each year. Find out what rules apply in your county.
Names of adjacent owners. The adjacent owners are potentially your neighbors. You can look up their names the same way you looked up the legal owner. If you have any questions about future plans or historical events in the area, write or call the neighbors before you meet the legal owner of the parcel you want to buy.