Short Sale Title Search

As soon as you get an owner to sign authorization, do you check for clear title first or get the bank to approve your short before you pay for that? i have heard both.
I am in the process of my first short sale and am stuck at this step.

additionally, if you are going to deal w/ multiple short sales at a time (10 or so for 1 or 2 to work out), how do you not throw away a fortune having title work done on a bunch of properties that may not work out? What kind of expense is related to checking title? Surely people are not spending thousands of dollars for title search and insurance for properties they don’t buy?


that was my thought exactly, but in 2 sources now that i have just read…the first steps say to get the auth. signed, get payoff statement and call a title company. i thought this was ridiculous for the same reason you stated. Thanks.

I just get a title abstract before I make an offer. You can make the offer contingent on a clear title. After the offer is accepted you can get a full title search done. If there are any unknowns that do show up, you can renegotiate.

You will need a title company as part of your network in this business anyway so If you offer to close using the title company you will get a better rate for a title search. ( ask if they offer discounts for investors)

Remember you will be needing the title company a lot if you’re doing a lot of short sales.


what exactly is a title abstract. We have 5 rentals and all we have ever done are conventional loan/purchases - every time I hear the word title company, I hear 1500.00+ going out of my bank account.


Form the REI website “Investing Glossary”: Abstract of Title - historical summary of all of the recorded instruments and proceedings that affect title to a property.

Basically somone (like a Title Clerk from the Title Company) goes through the property’s chain of ownership and lists all instruments and proceedings (like liens, rights-of-way, etc.) that have been recorded agains the property. By examining it, you can get a pretty good idea of whether or not the title is clear.

Do NOT confuse with “Title Insurance”!