Title Issues and Fixes

What it is: The seller still owes money on a loan secured by the house. The loan must be paid off at closing so the buyer receives a clean title.

What you do:

• Confirm on the first seller call how many loans they have (first mortgage, second mortgage, home equity line, reverse mortgage).
• Make sure the seller signs title's payoff authorization.
• Confirm title has ordered each payoff, and that each "good through" date is after the closing date.
• If closing moves, ask title to update the payoffs.
• If the payoff is higher than the seller expected, call the client before you talk to the seller.

Who solves it: Title orders and pays it from proceeds. The seller may need to call their lender to authorize release.

Typical time: 2 to 5 business days for the payoff letter. Reverse mortgages and loans in default can take longer.

Watch out: If the payoff is more than the contract price, the deal does not work as written. Red escalation. Options for the client include a short sale, a different structure or ending the deal.

What it is: The seller paid off a loan years ago, but the lender never recorded a release. The public record still shows it.

What you do:

• Ask the seller for any proof of payoff: a paid in full letter, the final statement or a bank record.
• Send what they have to title.
• Ask title which path they will use: a release from the lender, or a title affidavit and indemnity where allowed.

Who solves it: Title, with the old lender or its successor. If the lender no longer exists, title may need more time or an attorney.

Typical time: 1 to 4 weeks.

What it is: A court ordered the owner to pay a debt (credit card, medical, personal loan, lawsuit) and the creditor recorded it against the owner's property.

What you do:

• Get the list of judgments from the commitment: creditor, amount, date.
• Ask title whether each one truly belongs to the seller. Common names produce false matches. If it is not the seller, title usually needs a signed name affidavit.
• For real judgments, title requests a payoff. Tell the client the total and how it affects the seller's proceeds.
• If the total is too high for the deal, the client or the seller's attorney may negotiate with creditors. That is not your job, but you track it.

Who solves it: Title for payoffs and name affidavits. The seller or their attorney for negotiation.

Typical time: 1 to 3 weeks; negotiated reductions take longer.

What it is: A contractor who was not paid for work on the house (mechanic's lien), or a state agency collecting unpaid child support (child support lien).

What you do: Get the lien details from the commitment. Ask title for a payoff. Report the total to the client. For a disputed contractor lien, the seller may need to settle or the lien may need a bond. Track it.

Who solves it: Title, the seller, the contractor or the state agency.

Typical time: 1 to 4 weeks.

What it is: In a community with a homeowners association (HOA) or condo association, the owner owes dues. Unpaid dues can become a lien. Even with no lien, title needs a statement of the account (often called an estoppel or resale certificate).

What you do:

• Ask the seller on the first call if there is an HOA and who manages it.
• Make sure title orders the HOA statement early. Some associations take up to 10 business days and charge a fee.
• Check the HOA statement for transfer fees, special assessments and rules about rentals or approvals for new owners. Tell the client and dispositions; some end buyers cannot use the property as planned.

Who solves it: Title, with the HOA or its management company.

Typical time: 3 to 10 business days for the statement.

What it is: The owner has not paid property taxes. Unpaid taxes are paid at closing. If they have been unpaid for a long time, the county may have sold a tax certificate or scheduled the property for a tax sale, which sets a redemption deadline.

What you do:

• Ask title for the full tax figures, including any delinquent years and penalties.
• Ask directly: "Is there a tax sale or redemption deadline on this property?"
• If there is a deadline before the closing date, Red escalation. The deadline is set by the county and does not move for your closing.

Who solves it: Title, with the county tax office.

Typical time: 1 to 3 business days for figures. Redemption deadlines are fixed.

What it is: Debts owed to the city: unpaid water, sewer or trash bills, or the cost of work the city did on the property such as boarding it up, mowing or demolition. These often do not appear in a normal title search and need a separate municipal lien search.

What you do:

• Make sure title ordered the municipal lien search on Day 0.
• When results arrive, list every item and amount for the client.
• Ask title which items will be paid at closing and which need to be cleared before.

Who solves it: Title, with each city department.

Typical time: 1 to 3 weeks for the search and payoff figures.

What it is: The owner owes federal or state taxes and the tax agency recorded a lien. A federal tax lien attaches to all of the owner's property.

What you do:

• Escalate Yellow the day it appears. These take time.
• Ask title for the path: full payoff from proceeds, or an application for a certificate of discharge so the property can be sold even though the full tax debt is not paid.
• The seller, often with a tax professional, prepares the discharge application. Federal guidance suggests applying at least 45 days before the planned sale.
• Ask the client whether to extend the closing date now, rather than later.

Who solves it: The seller and their tax professional with the tax agency; title handles payment at closing.

Typical time: 30 to 60 days or more for a discharge. A full payoff is faster.

Watch out: Do not discuss the seller's tax situation in detail or give advice. Refer them to a tax professional.

What it is: The city cited the property for problems such as unsafe structure, overgrown yard, trash, broken windows or unpermitted work. Unpaid fines can become liens. Some cities require the violations to be fixed, or the new owner to sign an agreement to fix them, before transfer.

What you do:

• List each violation, fine and status from the search or city records.
• Ask title whether the fines can be paid at closing and whether the city requires anything from the buyer.
• Tell the client and dispositions. Many end buyers will accept violations if they know the list and the cost; the problem is surprises.
• If the city must inspect before transfer, schedule it early.

Who solves it: The seller or the buyer (per the contract), with the city code department. Title pays recorded fines from proceeds.

Typical time: 1 to 8 weeks depending on the city and whether repairs are required.

What it is: Someone pulled a building permit (for a roof, electrical work, an addition) and never got the final inspection. Some cities and lenders require open permits to be closed before a sale or a loan.

What you do:

• Ask title or check with the client whether permit records were searched.
• Tell the client and the end buyer's side.
• Options the client may choose: the seller closes the permit with a final inspection, the end buyer takes the property with the permit open (if title and the lender allow), or the contractor or owner applies for closure or an expiration letter.

Who solves it: The seller or client, with the city building department.

Typical time: 1 to 6 weeks.

What it is: A company that leased or financed equipment attached to the house, often solar panels, recorded a filing claiming an interest in the equipment.

What you do: Ask the seller about solar panels or other leased equipment on the first call. If title finds a filing, ask the client whether the buyer will take over the lease or whether the seller must pay it off. Get the leasing company's transfer or payoff requirements early.

Who solves it: The seller and the leasing company; title clears the filing.

Typical time: 1 to 6 weeks.

What it is: An owner on title has died. A dead person cannot sign a deed. Someone with legal authority must sign for the estate, usually a personal representative appointed by the probate court (called an executor, executrix, administrator or administratrix depending on the will and the state). Some states offer shorter small estate procedures. Some properties pass outside probate (through a trust, a transfer on death deed or joint ownership with survivorship).

What you do:

• Ask how title was held when the owner died. Share the answer with title.
• Ask title which path applies: probate, a small estate process, an affidavit of heirship, or a non-probate transfer.
• Collect from the family: certified death certificate, the will if there is one, and letters testamentary or letters of administration if probate is open.
• If probate is not open and is required, tell the client the realistic timeline. The deal may continue as a longer file rather than end.
• Use the estate titling and signing rules on page 07.

Who solves it: A probate attorney and the court, with the heirs. Title confirms what it needs.

Typical time: 1 month for simple small estate cases; often 3 to 12 months or more for full probate.

Watch out: Treat the family with care. They are grieving. Never pressure them to "hurry up" with paperwork.

What it is: When an owner dies without a clear plan, several relatives may each own a share. Title needs every one of them to sign, or a legal process that removes the missing person's claim. Sometimes an heir cannot be found, refuses to sign, or did not know they had an interest.

What you do:

• Ask the contact person for a family tree: the deceased owner, spouse, children, and any children of children who have died.
• Send the family tree to title and ask exactly who must sign.
• Track each heir: name, contact, relationship, agreed or not, signed or not.
• If an heir cannot be found or will not sign, escalate to the client. Options include an attorney led quiet title action, buying out shares, or ending the deal.

Who solves it: Title, the heirs and an attorney.

Typical time: Weeks if everyone cooperates; months if a court process is needed.

What it is: The owners divorced, or are divorcing. The ex-spouse may still be on title or have rights in the property even if they moved out years ago. In some states a spouse who is not on title must still sign because the home is a protected homestead.

What you do:

• Ask on the first call: "Is anyone else on title, or does anyone else have an interest in the house, such as a former spouse?"
• If divorced, ask for the final divorce decree and any property settlement. Send them to title.
• Ask title whether the ex-spouse must sign the deed.
• If the ex-spouse must sign, the client decides who contacts them. Be neutral and factual with both parties.
• If the divorce is still in progress, the court may need to approve the sale. Escalate Yellow.

Who solves it: The seller, the ex-spouse, title and sometimes both parties' attorneys.

Typical time: 1 week if the decree is clear; months if the divorce is in progress or the parties disagree.

What it is: The way the owner is named on the deed does not match the contract or their ID. Examples: a maiden name, a middle initial missing, a misspelling, a business name that changed, or a house owned by an LLC when the contract lists the person.

What you do:

• Compare three names on Day 0: the contract, the public record and the seller's ID.
• If the record shows an LLC or trust, the contract needs to show that entity as seller. Ask acquisitions and the client to fix the contract with an addendum.
• For small differences, title usually needs a name or identity affidavit ("also known as").
• For entities, title needs authority documents (operating agreement, resolution, trust certification). See page 07.

Who solves it: Title, with documents from the seller.

Typical time: 1 to 3 weeks.

What it is: The history of ownership has a missing link. Example: the record shows a sale from person A to person B, but the seller says they bought from person C. Or a deed was never recorded, has a wrong legal description, or was signed by someone without authority.

What you do:

• Ask the seller for any old deed, closing paperwork or settlement statement from when they bought.
• Send everything to title and ask what is needed to fill the gap.
• Escalate Yellow. Fixes can include a corrective deed, an affidavit, or a quiet title court action.

Who solves it: Title and an attorney.

Typical time: 2 weeks for a corrective deed; several months for a court action.

What it is: Another buyer (often another wholesaler) recorded a memorandum of contract or an affidavit claiming they have a contract to buy the property. Title will not close until it is released.

What you do:

• Red escalation the day you see it.
• Ask the seller, calmly, whether they signed with anyone else. Write down exactly what they say.
• The client decides how to proceed. The other party may need to sign a release, or an attorney may need to step in.
• Never contact the other buyer unless the client tells you to.

Who solves it: The client, the other party, title and possibly an attorney.

Typical time: Days if the other party releases; weeks or months if they refuse.

Note: Some states restrict recording wholesale contracts or memoranda. If the client records memoranda on its own deals, follow the client's process and make sure every memorandum is released if a deal ends.

What it is: The seller's lender has started foreclosure. There may be a scheduled sale date. After that date, the seller may lose the property.

What you do:

• Get the foreclosure sale date on Day 0. Put it at the top of the tracker.
• Make sure title orders a payoff or reinstatement figure that includes foreclosure fees.
• Ask the client whether the seller's lender or attorney needs proof of a pending sale (often a copy of the contract and a closing date) to postpone the sale. The seller usually must authorize this.
• If the closing date is after the sale date, Red escalation.

Who solves it: Title and the seller's lender, often through the lender's foreclosure attorney.

Typical time: Controlled by the sale date.

What it is: The seller has an open bankruptcy case. The property may be part of the bankruptcy estate, and selling it may need the bankruptcy trustee's or court's approval.

What you do:

• If the seller mentions bankruptcy, write down the case details they share and tell the client the same day.
• Ask title what it needs. Usually the seller's bankruptcy attorney must request approval.
• Escalate Yellow and suggest the client plan a longer closing.

Who solves it: The seller's bankruptcy attorney, the trustee and the court.

Typical time: 2 to 8 weeks or more.