Before entering any real estate transaction, you must conduct a title search. A title search will show if the property owes back taxes or has outstanding liens. The search can also help protect you from unknowingly inheriting someone else’s debt.
There are many ways of conducting title searches. They include deeds, tax liens, and land records, among others. Usually, title companies have the responsibility of undertaking title searches.
You need a clean title to complete any real estate transaction. In case the title search finds out that there is a lien on the property, it is impossible to complete further transactions. Due to the risk involved, you should always hire a qualified professional to do a title search on your behalf.
The Basics of Title Searches
The objective of a title search is to establish whether a property owes back taxes and what liens may be present. It also helps determine if a property has issues or pending court cases. For instance, there may be public record errors preventing the sale or purchase of the property. This is usually common for real estate transactions.
An attorney or qualified professional will usually perform a title search for you. To search, you must conduct research using public records and legal documents. This will help identify the property’s vested owner, other judgments/liens against it, and the property taxes due.
Even though you can conduct a title search on your own, this could be risky. The reason is that legal documents can be hard to understand at times. You may also find difficulty accessing all the documents you need from the courthouse records.
Types of Titles: Dirty and Clean
A clean title proves that a person is the sole owner of a property. A dirty title shows uncertainty over the property you intend to buy. Surveys that are defective may be some of the title search findings that could lead to a dirty title designation. For instance, there is a possibility of a clerk misspelling some information when registering the title.
Title Insurance
There is a possibility that a company of an experienced professional misses something when conducting a title search. An existing filing error may be another factor making individuals overlook a document. Such mistakes can make you pay dearly, especially if you discover that the property you already bought has issues.
Title insurance will help protect you from financial loss in case of a problem during or after the sale. The purpose of title insurance is to protect you from loss or damage that may come from liens or problems with the title. Title insurance will cover you against the occurrence of past events.
The following are some of the hazards a title insurance policy will cover:
- Another party owning the property
- Forged signatures on documents
- Fraud concerning title documents
- Improper record-keeping
- Terms minimizing the property’s value or enjoyment (ex: unrecorded easements)
- Judgments against the property
What a Title Search Can Uncover
Besides revealing whether the property you intend to buy owes any taxes, title searches will also outline whether there are liens or special assessments against the property. Lastly, a title search shows whether the property you wish to buy has any restrictions or easements. In some cases, a third party may be entitled to use part of your property. All this information will be available in your title search.
Example of a Title Search
Let’s see a theoretical example showing how title searches work. Suppose you want to buy a new home; despite seeing a few prospective properties, only one of them interests you. For this reason, you decide to make an offer. It would be best if you made sure that the home you are buying has no issues that can deny you the chance of finishing the purchase. So, you decide to hire a title company to do the title search on your behalf.
The title company will undertake some procedures to find out whether the title to your would-be home is clean. This involves obtaining any legal documents of the home by perusing public records. The title company collects all the information and discloses it to you.
If the title is clear, you may decide to cancel or proceed with the transaction. If the property has any pending issues, you can forego the transaction. You may quickly clear up some defects like clerical errors. But it is impossible for some, like liens against the home.
Where Einfach Group (TEG) Comes In
TEG partners with many national title companies and real estate law firms. We are a tried and trusted BPM partner in many parts of the real estate transaction, search being one of them. At Einfach Group (TEG), we will help simplify every stage of your real estate transaction.
Our team has top-notch expertise that guarantees quality services, whether a simple one-owner search or a full search. We will thoroughly analyze records to obtain the vital search records you require. Contact us now to learn more!