Title Search: The Why, When, and How to Make Sure a Title Is Clear
When you’re ready to buy property, you want to know that real estate you’re buying has a clear title—free from liens, conflicting claims of ownership, or other issues that could result in a financial hit on your pocketbook. That surety comes with a title search.
Why do you need a title search?
A title search is the process that allows you to determine if the seller owns and can sell the property you’re buying.
It allows you or your title professional to flush out any liens against the property or the seller—back taxes, mortgages, mechanic’s liens—that need to be paid off at closing. In addition, a title search will uncover any other issues that could complicate your purchase and enjoyment of the property, including:
- Errors or omissions in deeds
- Mistakes in examining records
- Undisclosed heirs
When do you need a title search?
You need a title search any and every time you buy, sell, transfer, or refinance property.
Buying or selling property: The property you’re buying may have been in the family for years, or the seller may be a long-time friend. The key here is to protect yourself against any hidden liens or other problems that may occurred during the chain of ownership.
Mortgage or refinance property: Your lender will want to a new title search to protect their investment in the property. You may have incurred a mechanic’s lien from a contractor, or you may have a judgment placed on your house due to unpaid taxes, homeowner dues, or child support. The lender needs reassurance that the title to the property they are financing is clear.
How do you run a title search?
Anyone can do a title search. The documents concerning conveyances of land are a part of public record. However, that said, many buyers contact a title company to conduct an accurate and exhaustive title search.
To properly search a title, the searcher first investigates the physical records in the office of the county recorder or registrar, the appropriate real estate tax collection offices, and the offices of the circuit or district courts affecting the real estate property. More often than not, these records are not digitized: because they chronicle the history of the property and other terms and conditions, they are typically hard copies or image scans.
Here’s what you’ll find in each of these offices.
Collect documents concerning conveyance of real estate.
The office of the county recorder or registrar of deeds is the depository of all instruments relating to conveyances of real estate, including warranty deeds, quit claim deeds, deeds of trust or mortgages, easements, restrictions, affidavits, and state and federal tax liens.
Uncover unpaid real estate taxes.
A review of the records of the tax collection office will cover any unpaid taxes that may constitute a lien upon the real estate until they are paid. Properties with unpaid real estate taxes can be sold to satisfy the lien and collect the back taxes. Searchers, either you or your title professional, need to be diligent in acquiring the most current tax information: correct figures are essential for proration during closing.
Examine pending lawsuits.
Title searchers should carefully examine any pending lawsuits, mechanics’ liens, and suits in which judgments have been rendered. A suit that is pending could affect the title to property, and a ruling that is adverse to the current owner’s rights would also have an adverse effect upon the purchaser or mortgage holder of that property. Likewise, if a money judgment has been entered in the court records, that constitutes a lien against any real estate owned by the debtor. This information must also be disclosed as a result of the title search.
Search pending probate proceedings and final settlements for correct ownership.
You or your title professional should also search the county records of probate proceedings to ensure that any inherited property was probated properly. Occasionally, a probate estate in which real estate is involved may either be pending or a final settlement has yet to be filed in the real estate records of the county. Inspect these records to find the correct ownership of the property and determine if more requirements are needed before issuing the commitment for title insurance.
Once the title search has been completed, you or your title professional will submit a chain of title and supporting documentation to the title examiner. The examiner then discerns the items that affect the title and those that must be cleared or shown as exception to title.