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When a clouded title complicates a flipping project

Flipping a home takes a lot of work. The process generally involves the purchase of a home that requires significant help to become marketable, putting in the elbow grease to improve it, and turning around to sell it for a profit. In California, home flipping is an industry that is subject to state and federal regulation.

Not long ago, this informational blog provided a post on how holding a mortgage on a property can change the timeline for when it can be flipped. This post will address how title issues can impact a potential home flipping process. As with all posts on this blog, readers should not rely on its contents for legal advice.

What is a property title?

A title is the documentation of ownership on a parcel of real property. When a person buys a home with a mortgage, the mortgage lender will technically own the property until such time as the mortgage borrower pays the loan in full. Liens, easements, and claims of past ownership can all cloud or confuse a title and draw questions as to who actually owns a property that is offered for sale.

How do title problems complicate flipping homes?

Once an individual finds a property that they want to flip they will have to determine who owns it so that they can make an offer for purchase. A clouded title may obfuscate the process and may delay the individual’s purchase of the home. Title insurance can help to some extent, as it may protect a prospective home flipper from losses if challenges to the title of their purchased property arise in the future.

Flipping homes can be profitable but taking on the work of a home flip can be hard and expensive. It is important that those who engage in the real estate process have solid legal guidance to help them through their challenges. Real estate attorneys in the Bay Area are available to support their home purchasing and selling clients with their questions and concerns.