If you’ve been in the real estate game long enough, you’ll need to have the handy knowledge set and skill of quickly finding out if a property has a lien. So this will be a quick guide on how to find liens on a property you’re interested in buying.
Let’s dive right in…
What is a property lien
When there is a debt on a property and it is recorded in county records, then the property cannot be sold or transferred until the debt is discharged.
3 general types of liens:
- Tax Liens — (when you stop paying your tax bill (typically property taxes), the county will automatically — record a tax lien on your property)
- Mechanic’s Liens — (when you don’t pay a contractor who works on your property, they can record a mechanics lien on your property)
- Utility lien — (When you stop paying your water, trash, or gas/electric bill the company has a right to place a lien from your house, stopping you from selling the property until the debt is cleared)
- Home buying lien — (when you get a loan for that home, the lender places a lien on the same property, meaning the house cannot be sold without the debt being cleared)
- Purchase-Money Security Liens — (Similar to a home buying lien, however not directly related to purchasing that home. Your home could be set as “collateral” when you borrow money from someone. Examples of this are credit loans, vehicle loans, and home purchases. )
- Non-Purchase-Money Security Liens — (Examples of these are a refinance or 2nd mortgage, where they use your home as collateral for that loan).
- Judgment Liens — (when a court places a lien on your property due to some judgment or case)
Before you jump into a real estate deal, you want to know what type of lien you’re dealing with to see how best to solve the situation.
Why you should know how to find liens as a real estate investor
When you enter escrow in any real estate transaction, the Title company will do the lien search for you.
But here are times when you want to know if there are any liens BEFORE you make any offers on the house. The reason being is so you know what you’re stepping into. It’s an unpleasant situation to be in when you enter escrow and then have to confront the seller about lowering your offer because of the unexpected costs of the lien.
Sure… it’s the seller’s fault, but if you’re a real estate investor having the knowledge set of quickly finding if there’s a lien is a must. It’s harder to renegotiate later than to do a little due diligence that can take 10-30 minutes (depending on your county).
So before we jump into the various steps on how to find off-market deals with liens. Because these can potentially be good deals.
How to find good deals with liens
See this great video on what the Brrrr strategy s is if you didn’t know:
But regardless of your investment choice, the best way to go about any of them is to find these properties off-market.
Even though liens sound terrible for the end user (the one receiving the lien), there’s actually a flip side. And that’s, that liens are public information (typically, depending on the county), and that means investors can pull a list of properties with liens to help solve whatever situation the homeowner is in.
SIDE NOTE: Apart from bad press and the public opinion of investors, MOST investors DO help the public (yes like everything in life, there are bad apples). And one of the ways (other than helping restore communities) is helping homeowners get out of tough situations that a traditional MLS market sale won’t do. So when you approach people about buying their home because they have a lien—I WOULDN’T if I were you bring up the lien thing—keep in mind that you’re helping people, not scamming them; not taking advantage. That’s what capitalism is all about: giving a solution to people who need/want it.)
On to your regular broadcast…
So, because liens are public information, you, as an investor, can pull a list of these properties and offer them to buy their house for a fast cash offer, if they’re looking to sell.
People in liens are more likely to sell a property. They might be in a tough situation and need help. Sure, there are some who just happened to forget to pay the bill and aren’t looking to sell, but, when it comes to finding distressed properties, you need to increase your chances of finding good deals, by looking in places people are most likely to sell (and need to sell quickly). And pulling a list of properties with liens, there’s a very good chance there’s a deal in that list.
How to pull that list of properties with liens
There are several sources where you can actually pull properties with liens directly.
- Propstream — (this is a paid data service for real estate investors. It’s one of the best in the business, and you can pull a lot more than just liens. There is a 7-day free trial if you click our affiliate link here (FYI, because affiliate marketing is service, and we only promote tools and services we use ourselves, we may get paid a commission for promoting this link)
- TitlePro247 — (another paid service that’s easy to use. You’ll need access to it via a title company)
- County — (this is free, but you’ll have to contact the county recorder’s office to see if they even give out this data in bulk lists. Some counties have a portal where you can search for this (more on this below)
Check out this video on how to pull certain lists on PropStream:
How to market to properties with liens
To find these deals off-market, you’ll have to reach out to these owners to ask, “Are you looking to sell for cash?”. To reach them there are several ways (after you pull your list).
- Direct Mail — (This is the most expensive way to reach out to them, but it’s one of the most effective and easiest methods of real estate marketing. You can get very personalized with your real estate marketing, and use handwritten notes and letters to boost your response rates.)
- Cold Calling — (The second most “expensive” method if you’re using a VA to make cold calls for you. However, we highly suggest you do your own calling and create your own cold calling scripts as you learn the skill set. International VAs, although very skilled, have language barriers that might affect your rapport and credibility with potential sellers. NOTE: most lists you buy DON’T have phone numbers, you’ll have to use a skip tracing tool to gather phone numbers. )
Watch this video on how to skip trace from a pro in the industry, Jerry Norton:
- Door knocking — (If you don’t have a large list (which in some areas you won’t), it doesn’t hurt to just go to the door. This is by the far the best way to get face-to-face with the seller and carries a personal element that none of the other mediums can match)
Alright, so we’ve covered how to find these sellers to make an “off-market deal” with them.
What about knowing what kind of lien a specific house carries, and how much is the lien?
How to find liens on a property
If you come across a situation where you need to know exactly what kind of lien a house has, this will be a step-by-step guide showing you the different methods for finding liens for specific properties.
We’ve already covered how to pull a list of properties with liens, now let’s go over how to search for individual houses…
First step: Ask if any liens
This is a “no-brainer” but as part of your buying process, when you’re speaking with sellers or their agents, you MUST ask if there are any liens on the house and how much if there. This is the first step to giving you a clue.
However, there are a lot of liars in this world and many people that don’t even realize there’s a lien on the house, so the next step (after asking) is you’ll SEARCH for liens on the property.
NOTE: even if the seller told you what liens they have, you still want to search to give you an idea of how much the lien is debt for and if there are any others they missed.
How to search for property liens (digitally and physically)
Before we start with the written guide, here’s a detailed video from an investor named Joe Crump showing you exactly how to find out if there are any liens in a property:
There are a number of ways to search for liens, and we’ll highlight a few of them giving you descriptions of how easy/accurate that method is.
NOTE: All liens are recorded in county offices. Most counties in the US make it very easy to search for liens. Others are a bit more difficult.
Tools—The easiest and fastest method but not as up-to-date—
There are a number of free and paid services/apps/tools that can pull up a property profile for you and will list any liens on that property.
The key element to finding liens in any of these tools is that you get to pull a “Property Profile”. Almost every property profile will show you a “Property History” section. The property history section will list ALL the transactions and recordings on this property.
Here’s what the dashboard of a certain tool (Chicago Title Premier) looks like to grab a property profile:
Once you “Get property profile”, here’s what the property history section inside looks like:
There are some cons to this: Not ALL the transaction history will show in these easy-to-get property profiles; it will be limited to a certain amount that shows on the page. A FULL transaction history is done by a Title company. However, if you see actually SALES (or deed transfers), from one distinct party to the next, then you can be assured that there are no liens as a transfer would be impossible if there are liens.
List of tools that can pull property profiles:
– Chicago Title Premier (Free to a certain point) https://www.premier.ctic.com/
– Title Pro 247 (free to a certain point, but you must gain access via a Title Rep) https://www.titlepro247.com/
– PropStream (Paid service but very thorough information with lots of capabilities)
https://trial.propstreampro.com/cccf/ ( <- free trial affiliate link where we may get paid a commission)
Calling your local Title company — Easy. Accurate. Takes a little longer.
It’s good to have a good title rep at hand. When you buy a property, you have to go through the title to get the property title insured. Might as well grow a relationship with a title rep. When you do, you can email/call that person to ask for specific information regarding a property you’re interested in; Information like who’s the owner, any liens/mortgages, etc.
Going directly to the county office
— If digital: easy, fast, most accurate.
(If physical: Must drive to the county office, and request information (Sometimes you can call and they’ll give you that info as well))
This is the most accurate and up-to-date method to get lien information IF your county office makes it easy to gather that info. All the tools and services we listed above all go to the county office to get their information, but sometimes it’s not as up-to-date as getting it directly from the office.
Some counties have an online portal to do property searches. Usually, you’ll have to search for your country name (plus) “recorder office” or something similar to that. Each county calls its “recorders” office differently, but basically, you’re looking for the department that is responsible for recording property transfers.
Physical – Is this needed?
Some of the services listed above make their living on assuring they have very up-to-date and speedy service. So, it is more likely that a service like Propstream or Chicago title premier will have very accurate and up-to-date information to the point where doing the work of going physically to your county office isn’t needed anymore.
Liens are a part of real estate. They can help you find motivated sellers (using the techniques you learned above), they can help make better negotiations and deals (by knowing that there’s a lien you can negotiate a better deal with the seller) or they can hurt you later if you don’t research the property (by having to go back to the seller to renegotiate because Title found a lien, which just cost more time and frustration for the seller).
This is Call Porter, a full lead answering service for off-market real estate investors and we hope you enjoyed this article.