Before buying or selling real property, conducting a property title search is crucial. It can uncover hidden issues that might hinder the transfer of the deed, ensuring a smooth transaction for both parties involved. Buyers can identify hidden debts or liens that could result in their lender backing out, while sellers can avoid legal complications by verifying their legal right to sell.
Overview of Property Title Searches
Conducting a property title search involves examining various documents, including deeds, contracts, and other recorded papers. The goal is to determine if the property is "free and clear" of any defects like outstanding liens or zoning violations. As a buyer, it is essential to ensure that you obtain a clear and marketable title to avoid any legal issues in the future.
While hiring attorneys or specialized companies for a title search is an option, it is also possible to conduct one yourself. Some cities provide websites that assist prospective buyers in performing parts of the search. However, it is worth noting that opting for the cheaper route could result in greater costs in the long run if any legal complications are overlooked. Defects in the title can prevent property owners from selling their property and hinder buyers from acquiring their dream homes.
What a Title Search Can Uncover
A title search can reveal numerous problems that may render a property non-marketable. Some common issues include:
- A break in the chain of title, where someone who didn't own the property conveyed it, causing ambiguity in ownership
- Tax, mechanic's, or creditor's liens on the property
- An easement that affects the property's use
- Bankruptcy by the current owner, resulting in uncertainty in ownership
- Property occupied by someone other than the owner, leading to ownership disputes during probate
- Zoning ordinances preventing desired uses of the house, such as operating a home business
- Multiple current mortgages that must be paid off before the sale
- Judgments against the owner leading to additional liens
- Claims by neighbors of ownership of part of the land due to property survey issues
- Pending or current foreclosure
- Local permits that cloud title, such as those allowing the installation of power lines or towers on the property
- Pending divorce proceedings where a spouse contests property transfer
- Building code violations
Whether you are the seller or potential buyer, seeking advice from a real estate attorney regarding any encumbrances on the property and their consequences is essential. Once the property is free and clear, they can also assist with the proper transfer of the deed.
The Title Search Process
Performing a title search involves reviewing public documents in various offices, such as the county clerk's office, registry of deeds, recorder's office, or local courthouse in your county. The search is incomplete without checking for deeds, liens, judgments, and other encumbrances in multiple locations.
Each state and county has its unique way of filing land records, making it challenging to determine where and how to look. Some offices use a number system, property location, or owner's name to record documents like the deed and real estate contract.
For a home title search, you will need to know the property's location, block, and property lot, the owner's name, and any other relevant information. This information is then used to search for multiple deeds to ensure that there are no unexpected names on the documents and that the property's ownership history is continuous. Conducting such a search can be time-consuming and tedious, which is why most home buyers opt to hire a title company.
By conducting a comprehensive property title search, both buyers and sellers can have peace of mind knowing that the transaction is secure and free from any legal complications.
