An important part of the real estate closing process is ensuring the title on the property can be transferred free and clear and without defects. A title defect is an any issue the interferes with the proper and legal conveyance of ownership rights surrounding a given property from the current owner (or seller) to the homebuyer. Common title defects include liens associated with the property, judgments, unpaid taxes, or other encumbrances.
Any problems that are identified must typically be resolved before the real estate transaction can be completed. A title search is an investigation into the ownership history of the property and is conducted to discover any problems that may prevent this transfer of ownership rights. In addition, a title search can identify any easements on the property, deed restrictions, and property boundaries.
Who Conducts a Title Search?
A property title search is conducted by a title (or closing) agent of the title company handling the closing or a real estate attorney. It is generally performed during the closing preparation process, after the real estate contract has been ratified. The fee for a title search is typically paid for by the buyer.
How Is a Title Search Performed?
A title search usually starts with a search of public records. The title examiner conducting the search evaluate the chain of ownership regarding the property. They will also examine all records associated with the property that could affect title, including mortgage history, deeds, land records, marriage and divorce proceedings, bankruptcy documents, and probate records. Tax records will also be searched to ascertain whether there are property taxes that remain unpaid. If any defects are discovered, the appropriate steps will be taken to resolve the issues in an effort to render the title free and clear.
When Is a Title Search Necessary?
Title searches are performed during the closing process for new homes sales and the sale of existing homes. Since refinancing an existing loan requires the establishment of a new loan, a title search is also conducted during these transactions to screen for any title defects that may have been been missed in a previous search or to determine if any new judgments or liens have occurred against the property.
A title search is an integral part of the closing procedure. To learn more about this process, please contact the experienced team at Linear Title & Escrow today.