Importance of a Title Search in Real Estate Transactions

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Cheryl Ju
May 23, 2024

If you’ve embarked on the journey of buying property, one of the most important steps you need to understand is when and why a title search is performed.

So, what is a title search?

A title search is the process of determining the chain of ownership for a property by scouring public records to see who has a claim on the property in question. This includes any liens or zoning violations that may be attached to it.

A lien is an amount owed where the property stands as collateral. For example, the mortgage you obtain to purchase a property is a lien. There can also be liens from contractors, the municipality for taxes owed, or the homeowner’s association for example.

What is the title search process?

Once a purchase contract is ratified, a title abstract is ordered. The ownership of the property will be searched in county records spanning the last 40-60 years. Any defects in the record like unsatisfied mortgages, liens, judgments, and easements which affect the ability of people to use the property will be found. An opinion is then sent to the lender allowing a title insurance policy to be issued on the property. This shows the lender that the title they’re loaning their money against is a clear one. Since the property serves as collateral for the lender’s loan, they’ll want to be sure that the property stands without any other entity being able to lay claim to the property.

The title insurance policy you purchase will cover you in the event something is missed, and an encumbrance is discovered after closing. Title insurance is considered one of the best values in the insurance industry! Instead of a monthly payment, there is a one-time premium you’ll pay at closing that will cover any financial loss you might incur from a claim being uncovered down the road.

What kinds of defects might be uncovered by a Title Search?

Some of the most common issues found are:

  • A break in the chain of title: This occurs when someone who didn’t own the property conveyed it, resulting in the current owner not having a clear title.
  • Pending divorce proceedings, where a spouse could contest the property transfer
  • Tax, mechanics, or creditor liens on the property
  • An easement affecting the property’s usability
  • Building code violations
  • A bankruptcy causing ownership to be questioned
  • Claims by neighbors regarding land ownership
  • Local permits preventing the conveyance of a clear title

A clear title is the backbone of any real estate transaction. Conducting a title search is a comprehensive and meticulous process, making it essential for buyers to partner with a reputable title insurance company like Turner Title. Turner Title offers a detailed title report outlining all easements, restrictions, and other encumbrances affecting the property you wish to purchase. They also assist in securing a Title Insurance Policy, protecting against potential title defects that may surface after closing.

To learn how Turner Title can help with your next real estate transaction, visit our website today.

Elevate your real estate transactions with Turner Title, a proud partner of the Dalton Wade Real Estate Group. We’re not just a title company; we are here to make your transaction as smooth as possible, with our easy and hassle-free approach. Explore our advanced tools like the Turner Title Prospector for impactful farming, Qualia, the cloud-based title, escrow, and closing software, and our Sellers Net Sheet Calculator for precise estimates. Choose Turner Title to experience a redefined standard of efficiency and transparency in every transaction. Contact us today to discover how we can assist in your real estate journey.

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