What is a title deed search?

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After you’ve researched a home and picked the perfect property, there’s yet another search to be done: the title search. While title research isn’t as exciting as browsing through those listings or dreaming about moving in, it is a crucial step in a real estate transaction and can have implications for your purchase if problems turn out to be. are presented. Here’s what you need to know.

What is a title deed?

Title deed is the term used to describe the rights of the owner. It is not a document, like the act, but rather “refers to the concept of property rights,” says Megan Hernandez, director of marketing and public relations at the American Land Title Association.

If you are to buy a house, you want to make sure that the seller is the only one claiming the title. This confirms that there are no other claims or liens on the property, and that the seller, in fact, has the right to sell their house to you in the first place. This is where a title search comes in.

What is a title deed search?

A title search is the process by which a title company or a lawyer reviews public records to make sure there are no claims, liens, or issues with a property that could cause another person or entity to claim they have an interest in the home.

“This research is being conducted to ensure that marketable title to the property can be obtained and that no charge affects the property rights of the purchaser,” says Sarah Stitgen, closing attorney at Cook & James, a Roswell, Georgia office.

Stitgen notes that a title search is mandatory for any real estate transaction that requires title insurance. This includes homes purchased with financing, as mortgage lenders require a title search in order to provide funds for the loan.

“Think of title searches on a house like an employer’s background check on a job seeker,” says Landy Liu, general manager of Better.comhome and title insurance and escrow departments. “It also protects the lender. “

Who completes the title search?

A lawyer or a securities firm usually performs the title search, which is most often initiated after a contract has been executed by the seller and the buyer. However, the steps to follow may vary depending on the location.

“In New York, the research is done by independent securities firms,” says Greg Maybaum, a New York real estate attorney. “Once the contract is signed, the buyer’s lawyer usually orders the title search, and either that lawyer or the title company provides the completed report to the seller’s lawyer. It is the job of the seller’s lawyer to manage and resolve title issues with the title company.

The business or lawyer usually does the detective at the county or town clerk’s office where the property is located. Many of the necessary documents are now available online, so the researcher often does not need to physically go to an office to perform the research.

“This person reviews many sources of information related to property,” says Suzanne Hollander, lawyer and professor of real estate at Florida International University in Miami, such as:

  • Acts
  • County land registers
  • Property dishes
  • Tax privileges (federal or state)
  • Divorce cases
  • Bankruptcy court records
  • Approval case
  • Construction privileges
  • Judgments

A thorough title search will likely also include details of any mortgages attached to the property, street and sewer assessments, taxes, and any other title issues present, Hollander says.

Once all of the information is gathered, the title company or attorney will create an abstract report that reveals what has been found regarding the title.

How long does a title search take?

The title search can take as little as a few hours, but in most cases it will take 10-14 days. In general, the older the house, the longer the title search. If there is a long list of owners and transactions involving the property – a home equity loan against it, for example, or a past property line dispute – there is more work to be done to ensure that there is a clear title.

“Research can go back as far as 50 years, or as far back as needed to identify the root deed and examine each subsequent transfer of ownership,” says Stitgen. “This ensures that there is an appropriate chain of title from beneficiary to beneficiary, throughout the current owner. “

What if problems arise during title search?

A title search may reveal one or more issues with the title. Here is some common title issues, as well as the corresponding strategies to solve them:

  • Break in title chain – This problem can appear when there is a missing act in the chain. “If part A passes ownership to part B, then part C passes the same property to part D, we are missing the link between parts B to C,” says Stitgen. “This can be solved by getting a Part B deed to Part C, or a Part B deed to Part D.”
  • Incorrect or missing legal description on the deed – Depending on the nature of the error, this usually requires obtaining a corrected act from the same parties to correct the error. “In some cases an affidavit from a writer, preferably the party who drafted the document or saved the document, someone with knowledge of the transaction, may be sufficient to resolve the problem, but only if the error does not exist. is not material and does not change the nature of the legal description, ”says Stitgen.
  • Potential missing interests – When the chain of title includes a transfer via an estate, it is essential to ensure that the heirs have given up their interests in the property. “If this has not been done, it will be necessary to obtain acts from these parties freeing their interests,” says Stitgen.
  • Open security acts – Title search can uncover an open security document from the current or previous owner that has never been published. “If this is the case, research needs to be done to determine if this is left open in error. If this is the case, you will have to obtain a discharge from the holder of the guarantee title, ”advises Stitgen.
  • Connections – A privilege is a legal right or claim on property that is commonly used as collateral to honor debt. A title search will often identify potential liens on a property. These will require further research to find out if the lien has expired, if it may not actually be for a party in the chain of title, or if it is a valid lien that needs to be paid. .
  • Unpaid property taxes – Any overdue or “ad valorem” property tax, which is based on the home’s estimated value, will need to be paid before title is transferred to the new owner.

If one or another of these issues is detected, homebuyers typically have three options, depending on what’s allowed in their purchase agreement, according to Hollander:

  1. Ask the seller to resolve the problem before closing.
  2. Ask the seller to compensate the buyer for the cost of fixing the problem.
  3. Walk away from the case and receive a refund of their deposit.

Cost of title services

Buying a home includes a lot of expenses apart from the actual price of the house, and the title search will be added to the overall tab. There are two main costs for securities services provided by a securities firm or lawyer:

  1. Settlement Service Fee – These included expenses incurred to close the loan, such as the cost of wire transfer fees, escrow and underwriting the title insurance policy. The latter includes the cost of searching for titles and the cost of resolving any issues discovered, according to Liu. The price for performing the title search alone is often between $ 75 and $ 100, and can be paid by the buyer or the seller if the parties agree.
  2. Title insurance premium – “Title insurance guarantees the person who buys or refinances the house as the rightful owner of the property,” says Liu. “The premium is a one-time cost paid at closing that can range from 0.5% to 1% of the purchase amount. Since this is a percentage of the purchase amount, your premium may increase if your loan amount increases.

Can I do my own title search?

Anyone can search property records through their county clerk’s office, and there’s no law saying you can’t do a title search yourself. However, experts strongly advise against trying to sort out the details of a title deed yourself.

“Performing a title search requires knowledge of real estate requirements and lien periods and the ability to navigate a variety of courthouse files. It is not advisable to do this without experience, due to the complexity of recordings and indexing, ”says Patti DeGennaro, senior director of operations and process specialist at Title Alliance, Ltd., in Media, PA. .

Additionally, “if you want to purchase title insurance for your property, performing the title search yourself will not be enough, as the title insurer will require a professional to conduct, review and advise the search before issuing a policy.” Adds Stitgen.

With additional reporting from David McMillin

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