How to use your CRM for tracking unrecorded liens

What are unrecorded liens and why they matter

An unrecorded lien is a claim against a property that is not publicly filed in county records. These can be mechanic's liens where a contractor did work but did not file, or even old utility bills. They are tricky because they do not show up on a preliminary title search.

These liens can become a problem at closing. If they surface, they must be paid off before clear title can be conveyed, which can delay or even kill your deal. This is why you need to identify and track them as early as possible.

The risk of unrecorded liens means you cannot rely solely on public records for a complete picture. You need systems to capture potential signs of these issues through your conversations with sellers.

Setting up custom fields in your CRM

To track unrecorded liens, start by adding custom fields to your CRM's property records. Create a simple checkbox field labeled 'Potential Unrecorded Lien' or a drop-down with options like 'Contractor Work Mentioned,' 'Unpaid Bills,' or 'No Issues Noted.'

You can also create a text field for 'Lien Details' to jot down any specific information the seller provides. This might include a contractor's name, a dispute over a bill, or a specific type of work done on the property recently.

These custom fields act as an early warning system. When you are on a call with a motivated seller, you or your setter can quickly mark these fields if anything comes up that suggests a potential issue. This helps you to remember to investigate further.

Consistent use of these fields across all your leads ensures that no potential red flag is missed. It makes it easier to flag properties that need extra due diligence later in the process.

Capturing clues during seller conversations

The best way to catch potential unrecorded liens is by listening carefully to your sellers. Ask open-ended questions about recent repairs, renovations, or any disputes he or she has had with service providers. For example, 'Have you had any major work done on the house recently?' or 'Are there any outstanding bills related to repairs?' You can learn more about the first call with a motivated seller at /learn/first-call-with-a-motivated-seller.

Document everything in your CRM's notes section. If a seller mentions a contractor who did not get paid, or a dispute with a utility company, make a detailed note. Even seemingly small details can be significant later. Your CRM should be your central repository for all seller communication history.

Train your setters and closers to identify key phrases that might indicate an unrecorded lien. Words like 'dispute,' 'argument,' 'did not pay,' or 'unfinished work' should trigger them to ask follow-up questions and mark the appropriate fields in the CRM. This helps maintain lead quality, which you can read about at /learn/what-makes-a-seller-lead-exclusive.

Creating follow-up tasks and automations

Once a 'Potential Unrecorded Lien' field is checked, set up an automated task in your CRM to remind you or your team to investigate. This task might be to ask more specific questions during the next call or to flag the title company about the potential issue.

You can also create deal stages that specifically address these potential issues. For example, a 'Due Diligence - Lien Investigation' stage. This ensures that a property with a potential lien does not move forward without proper vetting.

Use your CRM's reminder system to schedule calls or emails to confirm whether any mentioned work was fully paid and completed. This proactive approach saves time and prevents surprises at closing. You want to clear these issues long before you get to the title company.

Integrating with your due diligence process

Before sending a property to your title company, export a report from your CRM that includes all notes and custom fields related to potential unrecorded liens. Provide this information to your title officer. This forewarns him or her and helps him or her conduct a more thorough search.

This proactive information sharing can save days or weeks in the closing process. If the title company knows what to look for, they can often resolve issues more quickly, or at least identify them early enough to prevent a last-minute deal collapse.

Your CRM is not just for tracking contacts; it is a critical tool for managing deal risk. By using it to systematically track potential unrecorded liens, you are protecting your investments and ensuring smoother closings. For more on managing leads, consider /how-to-work-your-leads.