What's a Title Search
What is a Home Title Search?
When selling their house, the seller must transfer ownership of the property to the prospective buyer. But can you guarantee that the seller is the true owner of the property?
Yes!
A title search evaluates past bankruptcies, divorces, deaths, county land records, state and federal tax liens, and court documents and vets the seller’s ownership of the house. The title company or attorney responsible for carrying out the investigation generates a title report, also known as an Ownership and Encumbrance report.
The report mentions the following details:
· Who is the owner of the property
· If there are any unpaid liens, easements, restrictive covenants, mortgages, etc.
· In there have been any prior ownership disputes
· A legal description of the house
For the real estate transaction to be complete, the house title search must yield a clean title.
How Does a Title Search on a Property Work?
To accurately determine the owner of the property, a title search company must lay down a chain of title. This document depicts the history of a home, right from who built it to its most recent owner. Though there may be other documents that also reflect the house’s title holder, a chain of title takes priority if ever an ownership dispute arises.
To establish a chain of title and have adequate documentation supporting it, the title searcher, a.k.a., abstractor, examines legal records and public documents. They look for undisclosed heirs, wills, and any financial expenses that may be a burden to the buyer in the future. The examiner then compiles this information in the title abstract.
The title company also uncovers any unpaid loans, secured debts, taxes, etc., that may pass on to the prospective buyer, thereby safeguarding their interests. Additionally, it checks for title defects like forgery and errors in deeds that could leave the buyer vulnerable to lawsuits in the future.
Do not confuse a title search with a home inspection. A home inspection is a visual and structural examination of the house. A property title search evaluates the legal status of the house and its owner.
The Result
If any defect is found during the search and mentioned in the lien title report, the real estate transaction is halted until the issue is resolved. Unsolved building code violations and errors in land surveys could be some of the possible causes of a dirty title.
You can discuss the problem with your real estate agent and come up with a solution that is acceptable to all.