What is a Property Title Search?
By Joey Marino, President Stark Trumbull Area REALTORS®
What is a Property Title? When you buy or sell a home, a property title is essentially a way of saying who has the right to own the property—and thus, to sell it.
While it may seem straightforward that a home seller owns his house, there could be hidden claims or liens on the property the homeowners themselves may be unaware of, making a title search essential for both buyers and sellers. Read on to learn everything you need to know about a property title search.
What is a property title search and how is it done?
Normally a property title search is completed after an offer to purchase real estate has been accepted by the seller. Multiple sources are searched, including deeds, county land records, tax liens on the federal or state level, divorce cases, bankruptcy court records, and other financial judgments against an owner that could potentially attach to a property.
The resulting Ownership and Encumbrance report is composed of documents that determine whether or not the property is free of liens and pending lawsuits, and if title ownership is accurately represented by the seller. A clean property title search means the buyer and lender agree there are no claims on the property that could become an issue after ownership is transferred.
Why are property title searches important?
For sellers: To sell your property, you must have what is called “marketable title.” This legal term basically means that there are no defects that might cause a lawsuit or someone to challenge your right to own the property.
Defects could include someone else claiming title to the property, a claim that the seller never owned it, filing errors, forgeries, liens, etc. Many properties have defects on a title.
For buyers: Property title searches are a vital step in the home-buying process. Besides determining who truly owns a property, they also ensure all existing liens, loans, child support, and judgments are disclosed—and dealt with—prior to the close of escrow. If liens or judgments aren’t discovered prior to closing, the buyer may face messy and expensive issues down the road.
Who performs a property title search and when is it done?
A property title search is typically ordered during escrow. The lender financing a home purchase will request a preliminary report from a title company. However, a search can be done anytime, by anyone, such as a buyer (who might not need a lender’s money) or a homeowner who’s looking to refinance their home.
Even the most skilled title professionals may not find all problems associated with a property when they perform a title search. The title company will also provide you with a title insurance policy that will help protect you in the case of an issue becoming uncovered later.
Find more tips on buying or selling a home on the realtor.com website.
The Stark Trumbull Area REALTORS® welcomes you to visit our website at www.starkrealtors.com for a complete listing of REALTORS® and Affiliate members who are sure to meet your professional real estate needs.
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Source: “What is a Property Title Search? Why it Matters for Buyers and Sellers”, by Margaret Heidenry, realtor.com