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What Is a Property Title Search?

How a property title search works When purchasing a valuable asset like a home or vehicle, it is crucial to ensure a smooth transfer of ownership. This is where a property title search comes into...

How a property title search works How a property title search works

When purchasing a valuable asset like a home or vehicle, it is crucial to ensure a smooth transfer of ownership. This is where a property title search comes into play. It acts as a legal certification that outlines the ownership details and rights of the owner. Conducting a property title search ensures that no one else has a claim to the property, giving buyers peace of mind.

Conducting a Property Title Search

What does a title search cost? What does a title search cost?

Buyers who have found their dream home must conduct a property title search to verify the current homeowner's right to sell. This search involves a thorough review of the property's ownership history. It also confirms that the property is registered with the local government. When the property is sold, the title is transferred to the new owners.

Different types of property titles exist, depending on the asset and ownership history. These titles may have restrictions that affect the sale of the property, such as outstanding liens and judgments.

Understanding the Difference between Deeds and Titles

Unlike a physical document like a deed, property titles are a legal concept that describes the bundle of rights associated with property possession. A deed, on the other hand, is a signed document that represents the property title and facilitates its transfer during a sale.

For a deed to be legally binding, it must be signed by both the buyer and seller and notarized. Failure to meet these requirements can lead to complications in the future.

The Importance of a Property Title Search

While owning a property title may seem straightforward, there could be hidden complications like liens or judgments against the property. To avoid these issues, buyers must conduct a thorough property title search as part of the closing costs.

In addition to verifying ownership details, a property title search also reveals any legal restrictions on the property's usage. Local laws may impose regulations on pet ownership, the number of vehicles, or securing personal loans for home renovation projects.

Once the title search comes back clear, buyers and sellers can proceed with the transaction. The buyer becomes the new title owner, receiving the bundle of rights associated with the property.

Understanding the Bundle of Rights

Bundle of rights Bundle of rights

Possessing a property title grants the owner a bundle of rights that outline their legal privileges. These rights determine what the owner can legally do with the property within the confines of the law, including reselling or limiting access to the property.

The bundle of rights can be divided into several sections:

Right of Control

The title owner has the right to decide how the property is used, as long as it aligns with any restrictions set by the local homeowners association. This gives the owner the freedom to use the property as their primary residence or for other purposes.

Right of Possession

The right of possession confirms that the title holder owns the property. As long as taxes are paid and any homeowner association regulations are followed, the property remains in the owner's possession. If a mortgage is taken to finance the property, the lender holds a lien against it and shares title ownership.

Right of Exclusion

The title holder has the right to determine who can enter the property. However, there are exceptions, such as law enforcement with a warrant or utility workers granted permission for maintenance.

Right of Disposition

This right allows the property owner to transfer ownership of the title. It is fully granted when the home is owned outright, without any partial ownership by a lender or third party through a mortgage or lien. The owner can sell the property, rent it out, or transfer ownership temporarily.

In Conclusion

A property title search is an essential step in the homebuying process. It ensures that the seller has the right to transfer ownership and provides valuable information about the property's history. To further protect against any ownership issues, new homeowners can consider purchasing title insurance.

Remember, conducting a property title search is crucial to safeguard your investment and ensure a seamless transfer of ownership.