The value of real estate is pretty much nil if no one knows who owns what. Property without title is easy to buy, tough to sell, and impossible to finance -- a combination which benefits only those who enjoy a good fight.
But even when title data is correctly stored in public documents, closing costs to buy, sell, finance, and refinance are needlessly steep if such information must be reviewed by hand.
But now the Essex County Registry of Deeds in Salem, MA is making property records available online, in a searchable format, and at no cost -- a pioneering effort with the potential to substantially reduce closing costs and speed transactions.
To assure that title data is current and correct, records offices around the country note each purchase, sale, lien, and related information. The catch is that digging out property records is not easy. The old books containing such information are antiques, and early property deeds often reference landmarks which no longer exist.
Placing property records online and in a uniform arrangement seems natural and obvious, but somehow not too many records can be found on the Web. Essex County says it is the "first deeds office to provide both document images and indices for public viewing on the World Wide Web 24 hours a day -- free of charge."
So why aren't more records online?
- Title records date back hundreds of years. Over this period there have been tens of millions of title changes, all of which are potentially important to someone. The sheer size of the property record inventory is a barrier to online placement.
- There is no central property records depository. Instead, there are thousands of county and state offices which house such information.
- It will cost big dollars to convert the present system to the computerized bits and bytes needed to post online.
The Essex County Registry has records which go back to 1639 -- that translates into 14,000 books and 5.4 million pages of material. And, according to Michael Miles, the assistant register, the aim is to place the entire collection online.
It turns out that not only are the Essex records on paper, they are also on microfilm -- a safety precaution in case the original documents are destroyed. The microfilm can be scanned at a cost of 3 to 8 cents an image and then converted for use online.
While it costs money to convert records for use on the Web, Miles says the county office will not charge online visitors. The register's office operates on a fee-for-service basis, and money is collected at the time a deed is entered into the system. That money, and perhaps some federal money, is being used to place records online.
Miles points out that having the records online may result in substantial consumer savings. For instance, when you finance or refinance a lender will require a title search to assure that the property can be security for the loan. Instead of an attorney going down to the courthouse, parking, going through old books, and then returning to the office, under the new system the attorney merely turns on a computer and calls up records by their book and page number. In this case, less legal time equals lower loan, recording, and closing costs.
And the system is not just available to attorneys. If you have a desire to see your deed at 3 AM, just fire up your computer and take a look. If you wonder about the price of that house down the street, the records are there for everyone to see.
And what about the title companies and private firms that now collect and re-sell title information? Will they be frozen out when public records are placed online and available at no cost?
Title companies make money selling insurance and closing services, depending on the state where they are located. Such activities will continue and company costs may actually decline because there will be no need to electronically catalog new closings -- the public records office is doing it for everyone. As to private information providers, the material placed online by a records office is not organized in the way usually preferred by realty professionals nor does it include related assessment information. The result is that a need for private services continues.
So far, records for 5,000 Essex County books have been placed online, material going back to 1992. The Register's office hopes to convert 600 books a year to the new system, and so it will take about 15 years to get all 5.4 million pages online.
That may seem like a long conversion time, but the Essex County program is a pioneering effort which should be seen for what it is: An intelligent use of public assets and public money as well as a model for other record offices nationwide.
Question Of The Week
Q We have 26-acre farm which has been sub-divided into parcels of 12 and 14 acres. A buyer now wants to purchase the 12-acre lot, a parcel with a 100-year-old cabin and the right to use a pond Can we use the buyer's deposit money to fix up the cabin?
A STOP! Unless the sale agreement says otherwise, you cannot touch the buyer's deposit. The deposit belongs to the purchaser unless forfeited because of a failure to go through with the contract.
The deposit is not your money. If the deal does not go through -- perhaps because required financing is unavailable or the property does not pass various inspections -- the deposit must be returned in full to the purchaser.
But why not sell so that repairs are unnecessary? Market the property "as is" with no guarantees concerning condition.
Please work with a broker, attorney, or legal clinic. Sign nothing without first obtaining professional advice.
One of the most important issues on the Web is the matter of privacy. What are your rights online? What should you expect from site owners? What rights are held by those who operate Websites? An excellent resource is the non-profit Privacy Rights Clearinghouse . This site offers extensive information as well as a lengthy list of privacy links.
Editorial Notice: Content on this page reflects the opinions of Mr. Miller only and not necessarily the views of any publication, organization or Website owner.