Homes Now Have Credit Reports: Using a Parcel Register* for Real Estate
If you’ve ever found yourself on the wrong end of a real estate deal gone bad, you know how imperative it is to do your due diligence in real estate. Like it or not, sometimes would-be homebuyers aren’t aware of their own financial state, aren’t honest with you about their home equity and ability to even pay you.
There’s a way you can check your client’s financial status before the deal is even made.
A Parcel Register* from GeoWarehouse is like a credit report, only on the property. A mortgage broker would use a client’s credit report to validate if they can get a mortgage based on payment habits. A Parcel Register* won’t tell you how the homeowner pays their encumbrances, but it will reveal what encumbrances exist, what lender they are with, when they were registered, and the registration value.
What exactly is a Parcel Register*?
A Parcel Register* from GeoWarehouse is a record containing property description and list of instruments registered against the property within the Land Registration System of Ontario as of the date of the property search. It’s a real time, up-to-date report for a property — the provincial ownership record. Exercise due diligence in real estate by identifying registered encumbrances and acquire an instrument number.
In addition to the above information, a Parcel Register* can let you answer certain questions that could be vital to your real estate deal, such as:
- Can your client pay you? Is there enough equity in the home?
- To answer this question, you would need to look at the value of the home, less registered mortgages, liens and other financial encumbrances. If there are many mortgages registered or something seems off, a Parcel Register* can let you look deeper. Three mortgages, for example, may be an indicator of an underlying financial problem and may indicate that there is a property lien.
- Is your customer “the” or “the only” legal homeowner?
- Is the property worth what the customer thinks it is? This can be especially challenging to determine in the changing markets.
You can use your Parcel Register* as a veritable property credit report that can uncover this information and much more. You can even get surveys, condo certificates, and research demographics.
A Parcel Register* includes:
- A property’s PIN (Property Identification Number)
- A legal description of the property
- Who the legal homeowners are, the type of ownership and percentage
- A history of property transfers, transferees/transferors, dates and amounts
- A history of registered mortgages
- A history of registered liens
- And so much more.
A lien or undisclosed mortgage can result in a deal not closing, or the deal will close but there may not be enough equity to cover commission. All things considered, it is a nominal expense to use a Parcel Register* to ensure that your deal closes safely.
Real estate sales professionals, want to access your own Parcel Register*? Real estate sales professionals can become a GeoWarehouse subscriber at www.geowarehouse.ca.
*An official product of the Ontario government pursuant to provincial land registration statutes.