Using Real Estate for Collateral
Real Estate is commonly used to secure bail bonds in Phoenix when the bonds are usually over $10,000.00, although when nothing else is available we have had clients use real estate to collateralize bonds as small as $2,000.00. Technically, we could use real estate for any size bond, but because of the work involved in property research, determining value, and recording, real estate for small bonds is not practical.
The process of determining the suitability of property for collateral on a bond is straight forward. The client provides us with:
- Owners name
- Property address
- Tax assessor’s number or parcel identification number
Other substantiating data like recent appraisal, copy of Deed, legal description, and latest mortgage balance statement may be required.
Once the client has provided the bail bond agent with the basic information, the bail bondsman will order a property report from our Surety or Title Company. Maricopa County Bail Bonds then carefully reviews the report for several key items.
- Today’s discounted market value of the property (discounted for a potential rapid sale)
a. Location of property
b. desirability of property
c. comparable sales
- Outstanding Debt
a. number of open mortgages
b. unpaid taxes
c. personal liens that may affect the property
Once the review process is complete, we simply subtract outstanding liens from the discounted market value to come up with available equity. If there is enough equity, we write the bond and have the client record the Deed of Trust or Mortgage at the County Recorder’s Office where the property is located.
Sometimes it’s Not So Easy
Occasionally, we hit snags with the evaluation of the property. Sometimes there are discrepancies of who the legal owner is. For example, many people use Quit Claim Deeds to switch ownership. Quit Claim Deeds must be recorded and they only convey the rights that the prior owner had to the property.
Sometimes the owner has died and left the property to his family. In order for the family to use the property for a bail bond, they must have recorded the legal conveyance of the deceased to the survivors.
Sometimes there are property tax liens, State/Federal income tax liens or child support liens that the property owner is not fully aware of that prevents the property from being used.
Sometimes the property is upside down. This term refers to the mortgage or lien being higher than the value of the property. In other words there is too much debt against the property to secure any size bond.
Maricopa County Bail Bonds is happy to evaluate the suitability of your property for any size bond. Be aware that any evaluation takes time, so if you don’t have the time to spare, consider buying your bond with cash or credit card.
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