When you find a property in poor condition listed at an affordable price, you may eagerly make an offer, anticipating a significant profit after you repair the property and then relist it for sale. However, properties that have significant issues with their overall structure often also have significant issues with their title or ownership records.
When you make a cash offer on the property, your main goal is likely to keep your cost as low as possible. You may have done a cursory title review on your own and not invested in a title policy because there was no lender to demand coverage. Now that you want to sell the property after making repairs, you have discovered that there is a tax lien or records from an old mortgage on title.
How can you move forward with flipping the property when there is an issue with the title?
You can potentially go to civil court
Although the quickest and simplest way to resolve a title issue often involves recording new deeds, there are many reasons why this may not be an option in your case. Maybe you cannot locate the other party, or perhaps they have refused to cooperate with you despite acknowledging that their lien or ownership claim is no longer valid.
Texas state law allows property owners to ask for a judge’s assistance addressing title issues. You can file a quiet title action. In such proceedings, you provide the courts with documentation that you have paid the lien or otherwise resolved the issue that led to the blemish on title.
A judge can review the evidence that you provide and potentially enter a ruling eliminating the lien or other records that would prevent you from selling the property.
How do you prove you have resolved an old lien?
If you were not the owner of the property at the time that an individual or business recorded a lien against the property, you may need to communicate with the previous owner. Other times, the best approach may involve partnering with an attorney who does title work specifically to review property records and prepare the necessary documentation for quiet title proceedings in Texas civil court.
Proactively seeking to eliminate title blemishes will help you more efficiently reach the closing table been trying to flip a piece of residential real estate.