Property Document Analysis Overview

Property records, one of the most commonly utilized public records, can be used to learn a wealth of information about a property and its owner.  Over the following weeks, we will be posting a series of articles here describing how to conduct an analysis of the several principal types of property documents.

  • Part I     Deeds
  • Part II    Mortgages
  • Part III   Assessments and Tax Payments
  • Part IV   Permits and Inspections

In this introduction to the series, we will provide an overview of some key considerations when researching property records.  Analysis of property records can be used to make a number of determinations, including: learning a property's value and what it suggests about the owner's wealth, if someone has received a loan improperly, whether taxes on a property have been paid timely or assessed late fees, if a property is used as a primary residence or for other purposes and if there are any adverse issues associated with a property's construction permits or health and safety inspections.

There are several factors to consider when conducting property analysis:

  • 1)      Real property is used to secure the indebtedness outlined in a Deed of Trust or Mortgage.
  • 2)      All property transactions begin and end the same way: with the sale or transfer of real property.  Sales or transfers are documented in Deeds.  Loans involving property are documented in mortgages or deeds of trust.  Loans involving property are released when they are paid back, which is evidenced by the filing of what is typically called a Reconveyance or satisfaction.
  • 3)      The sale price of a piece of property can sometimes be found in the property deed.  When not available from the deed, the sale price can be computed from any transfer tax paid at the time the property was sold.
  • 4)      The value at which a property is assessed for tax purposes is not the same as the market value of the property, although these two numbers will be closest at the time a property is sold because the sale of the property typically triggers a reassessment of the property's value for tax purposes.  After a sale, a property's market value usually rises faster than its assessed value.
  • 5)      Property taxes are used to pay for things like schools and libraries and roads (although this varies by locality).  So, when someone is late in paying (or hasn't paid) these taxes, they are taking money from things that serve a public benefit.
  • 6)      Many jurisdictions allow home owners to take exemptions which reduce their tax burden.  Examples include homestead, over 65 years, etc.  Homestead exemptions can typically be taken only for a person's primary residence (you should review the requirements of the jurisdiction).  Homestead exemptions are important in ascertaining a person's primary residence and can cause trouble if a person takes an exemption at more than one property or if a homestead exemption is taken on a residence outside of the district for which the person is running for office.