A Title Search is a Necessity; What a Title Search Can Uncover
A title search performed by a title company is a very important part of a real estate transaction. A title search can uncover a number of things, many of which can lead to challenges to title ownership.
Title searches can also uncover many things that could potentially cost you a lot of money down the road to fix. That is why it is so important to choose an experienced, qualified and competent title company that is skilled in title searches and title examinations. An experienced title company will be able to uncover any of these title situations before the real estate deal is closed.
Here are some examples of what a title search can uncover:
However, a title search is only as good as the title examiner.
Confirm Ownership — While you may be considering buying a piece of property from Mr. X, who says he currently owns the property, a title search may uncover something else altogether. What if Mr. X’s brother is challenging Mr. X’s ownership? Or what if one of their nieces comes forward to say that she is actually the owner of the property? If Mr. X is not legally entitled to sell you the home, you cannot continue with the real estate transaction.
In addition, a title search will also determine if Mr. X has all of the rights in land to sell the property. For example, over the years and through different ownership of the property, one owner may have acquired any mineral rights to the land, while someone else may have acquired the utility rights to the land.
Any Liens or Outstanding Mortgages — A title search will also reveal if there are any liens recorded against the property. Liens are claims attached to the property by a creditor, such as a homeowner’s association, mechanic’s or judgment tax lien. Any liens on a property, especially if you are buying any bank-owned property such as a house in foreclosure, could potentially become the responsibility of the new owner. That is why it is imperative to do your due diligence with a thorough title search before buying a property.
A title search will also identify any outstanding mortgages on the property, title defects or any other type of restrictions that could limit the use of the land.
A Title Search AND Title Insurance
While a title search will identify many potential issues with a property, it is not always able to reveal and discover hidden problems. That is why you also need to have title insurance to protect your investment.
For example, if the previous title owner, Mr. X lied about his marital status, then potentially a Mrs. X could lay claim to the property in the future, saying that Mr. X had no right to sell it. Other potential hidden problems not revealed by a title search could involve fraud, forgery, or mental incompetence.
Don’t let any title issues jeopardize your right to ownership or cost you money down the road. Hire a reputable title company with an examiner with years of experience.