The title search is an essential part of the period between ratifying the contract on a new home and settlement. While admittedly not the most exciting part of the real estate process, a title search is extremely important. Allow us to explain.
What is a Title Search? A title search is an examination of public records to confirm a property’s legal ownership and determine what, if any, claims are on the property.
In other words, it ensures the property title is legitimate, so that the buyers are certain they are the rightful owners of the property.
A title company or real estate attorney will perform the title search for the buyer. While it is possible for buyers to conduct their own title search, it is not recommended due to the complexity of the documents. Your Realtor will likely recommend a title company to perform the title search. This one-time expense will vary based on the size of the loan and jurisdiction. The title search is part of the buyer’s closing costs.
The Search: The search will examine public records and legal documents to identify the property’s vested owner, liens or other judgments on the property, any outstanding loans on the property, and any owed property taxes due. It also will check to ensure that no one else (such as a missing heir) could claim ownership (full or partial) of the property. The title company will check for any restrictions, easements, leases, or other issues that might affect the property’s ownership. A survey of the property may also take place.
Common Title Problems
If after settlement, an issue with the property arises, title insurance can protect buyers from financial loss related to lawsuits or claims on the property.
Most lenders require you to purchase lenders title insurance, but you will likely want to buy your own policy as well. For example, if the title was incorrect and another party is the rightful owner of the home, these policies would likely pay you and your lender the home’s value owed.
The Bottom Line - A title search is a must. Use a professional and consider purchasing title insurance as well. If you have any questions, please reach out. We are always happy to discuss any and all matters related to your home.
Author: The Goodhart Group
Some consumers have a lot of false assumptions about the housing market – and those beliefs may cause them to miss out on a great house.
HouseLogic.com recently featured some of the biggest misconceptions that buyers have, including:
Bottom line - If you've found your dream home and the 20% rule is out of reach, give us a call. We work with reputable lenders who have a variety of products that will be able to help you. Even though interest rates are inching up little by little, they are still at historic lows and it's a great time to buy.
Live Naples Luxury
The Team at eXp Realty are available to answer any questions you may have regarding the Naples/Marco Island market. Contact Us.
It pays to have agents who are familiar with the ins and outs of the community. We're here to help guide you.