We are often asked in the title and escrow business what trends we see in real estate. As an escrow officer we see all kinds of different transactions, however, they do seem to trend. I had a period, lasting about 5 months, where it seemed almost every file that came across my desk had something to do with probate (see my article in a past AZREIA newsletter “I See Dead People”). That was followed by a period of broken priority (or loss of priority from mechanics liens for properties that are currently under construction). The most recent trend is the real property owner not signing the purchase contract.
Just how do you know who the real owner is? If they are deceased they are certainly not going to “stand up”. Some investors search County records on the County’s website to see what the last deed that was recorded shows, while others have more sophisticated programs or search tools that they purchase to do their research through. A simple FREE tool that you can utilize is a vesting and lien search from your favorite title company (hopefully that favorite Title Company is Chicago Title). With just a simple email to your escrow officer you are able to request a FREE vesting and lien search from our property research department. The vesting portion will show you the last recorded Deed on the property, which shows the current owner and how they hold title to the property.
Sounds simple right?! How could that information not be accurate? There are other Deeds in the chain of title (the history of the property showing all transfers and liens on the property). The current owner of the property can be effected by Deeds in the past and Deeds in the future.
Future? Yes, future! A Beneficiary Deed can be recorded on a property prior to the owner of record passing. Once the owner is deceased and their death certificate is recorded the Beneficiary’s Deed is then activated. Sometimes the Assessor’s office will only show the Beneficiary Deed on their website, so it can be hard to determine who is currently in title to the property. A recent issue that we encountered was a minor on the Beneficiary Deed. The purchase contract was signed by the “executor of the estate”. That is all fine and good, however, there were three people listed on the Beneficiary Deed (one of which is a minor). If you run into a situation similar to this contact your favorite real estate attorney (or contact AZREIA for a referral for a real estate attorney that specializes in investor transactions) to receive legal advice on how to proceed and how to make sure your current contract is valid.
The past? Yes, way too many times the past can affect the current ownership. In the state of Arizona a homeowner is able to prepare and record their own Deed to their own property. That is awesome news! Or so it seems until someone passes and it’s too late to realize the Deed may not have been prepared correctly. Husband and wife as community property or husband and wife as joint tenants? That is normally the question most people answer or think about in regards to a Deed. But what about the right of survivorship verbiage for both of those specific ways to hold title? If left off, in most cases one, if not both deceased owners estates will need to be probated.
Take the extra step to make sure you are negotiating with the proper party. Contact your Escrow Officer if you have any questions as to who the real property owner is, because the real one may not be able to, or doesn’t stand up (sometimes it is someone that assumes they have that right). When in doubt get a vesting and lien search for free.
by Amy Layton (formerly Amy Frink) AVP/Branch Manager Chicago Title Agency