Real Estate Investors – Title Problems

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There is nothing worse than attempting to purchase a real estate investment property or try to sell one, and then finding out there is a problem with the title. One of the most common of these problems is known as a cloud on the title.

A cloud on the title is any invalid note, information, or encumbrance that kills the ability to market and sell the title to a property. Some of the most common examples include expired options and unreleased paid liens. Before you can get insurance on the title or sell it, these questions and problems must remove the cloud before the title can be transferred. The good news is most title problems are fixable.

How to Clear the Cloud

The most important way to spot and fix title problems is to start with research. You can do your own through careful search of courthouse records and asking questions of professionals. The easiest way to research the problem is to hire a title or abstract company or attorney who specializes in title searches.

Cloudy Areas

There are a few places to start looking for title discrepancies. First, start by examining the local, state, and federal tax commissions. For past unpaid taxes, there may have been a tax lien placed upon the property. Second, check for other liens that may have been placed on the property. Sometimes, contractors do not get paid in a timely manner for work done on the property or contractor suppliers don’t get their bill paid. In some states, those suppliers can also put a lien upon the property until their bill gets paid. Third, surrounding neighbors may have formed a dispute upon the boundary lines of the property you are buying. When properties are very old, people’s memories get skewed as much as the lines of the property.  Fourth with older properties, there may also be heirs that are missing that have not released their rights to the property.

After you have found the discrepancies, it would be wisest to hire an attorney to help correct the issues and to give an estimate of the cost of fixing them. Some of these problems will just require a signature or two on the right form and getting the form filed in the proper office.

The good news is most properties even after fixing these title problems are great real estate investments. If you are looking to buy a property with a cloudy title, there is a good chance that clearing up the title will leave you paying a lower price for a high property value. For more information on all of the issues that affect real estate investment or real estate franchises, visit us at


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