What is ‘Title Search’ and what is involved in the process:
A title search involves a thorough research and examination of recorded transfers and conveyances on a property, real estate or land. This process will identify and legally confirm the property’s current legal ownership as well as surface any liens, encumbrances or claims that could potentially impede proper transfer and potentially cloud title if no cured properly. This includes judgments and delinquent taxes owed on the property.
Who performs a title search and why:
A title search is typically performed by a title company or a real estate attorney usually on behalf of potential buyer interested in a purchase or acquisition land or property. In many cases a mortgage lender will initiate the title search to ensure and verify legal ownership of the property and expose any outstanding claims or judgments against the property before underwriting and pre approving a loan or using the property as collateral for other credit purposes. The benefit from using a third part such as a title company or attorney is indemnification of the search AKA a “Title Opinion” or “Title Guarantee” in the form of a title policy.
Potential Issues exposed in a properly conducted Title Search:
Prior to the opening of escrow and purchase of a property, the title company or real estate attorney will perform due diligence with a search all available public records on the property’s past and current ownership. Once the search has been completed, a preliminary title report will be issued. If there are any problems or issues that arise with the current title, the buyer would want to notify the seller and disclose the issues with the seller. Depending on the type of issues found, a buyer can then determine whether or not they wish to move forward on the purchase of the property or what avenues would be required to cure the defects on title. Some issues can be difficult and costly to resolve while other issues can be cleared up rather easily with minimal effort and cost involved.
The bottom line is that even a reputable title company or attorney experienced in conducting these title searches can on occasion accidentally omit or miss an issue that can arise later during the transaction. This includes errors mad by the recorders office in the indexing of a recorded document or paperwork error that can lead to a document being completely overlooked. These types of mistakes and human errors occur ultimately leading to a costly and sometimes drawn out purchase agreement. This is why we always recommend to our client to always purchase title insurance which will protect you the buyer as well as the mortgage lender from any potential financial losses if an issue should arise during the escrow and closing of a sale.
In the busines of real estate and land aquisitions, a buyer (or receiver of property), should always perform a “Title Search” and “lien and encumbrance search” in order to assess the property title and ultimately obtain title insurance. If performed properly, a compilation of all records pertianing to, and potentially affecting title will be obtained to determine if conveyance and transfer of title can be completed. This includes any potential defects or “clouds” such as various liens, judgments, foreclosure, NOD activity, easements as well as voluntary liens such as mortgages and lines of credit as well as assesments recorded against the property.
The title research company or attorney compiles this information to assess the “marketability” of the property title and issue ultimately a “Title opinion” and identification. Any encumbrances or liens against the property are considered “exceptions” in the title insurance coverage. In addition, a title search on property is the process of obtaining records evidencing transfers and events in the property’s history listing conveyances in a chronological order to determine relevant interests and regulations concerning that land/property.
Additional title search resources can be found @ https://www.ustitlerecords.com/title-search-resources/