Once you have found a house that you would like to buy, you will need to have a title search conducted before you finalize the purchase. A house’s title refers to legal ownership of the property. Conducting a title search is a critical step in the home-buying process, but prospective buyers sometimes don’t understand what it entails or why it’s necessary.
What Is a Title Search?
Before you buy a house, you need to make sure that the person attempting to sell it actually owns it and has the legal authority to sell it. You may be surprised to learn that disputes related to ownership and other issues frequently come up when someone tries to sell a property. A title search can uncover issues so they can be worked out before the deal moves forward or so you can walk away and avoid a legal and/or financial nightmare.
An attorney or a title search company will go through all public records related to the property you’re thinking about buying. A title search can include a review of documents related to ownership, property taxes, homeowners association fees and bills from contractors, as well as wills, divorce decrees and other documents.
What Sorts of Problems Can a Title Search Uncover?
A title search may reveal evidence that the person trying to sell the house doesn’t have the legal right to do so. Someone else may have a claim to ownership that the seller may or may not be aware of. For example, it’s possible that the house was left to someone in a will decades ago, but the will was only recently discovered, or that a previous bill of sale contained an error or irregularity.
A title search may uncover financial issues. If a homeowner doesn’t pay all property taxes, homeowners association fees and contractors’ bills when they’re due, those debts can get passed on to the next owner. If old debts were never paid, they could become your responsibility. A title search may also find that there is an outstanding lawsuit or a legal judgment related to the property.
A title search may reveal information about an easement that the current owner didn’t mention or didn’t know about. An easement gives a person or entity the right to use a portion of someone else’s property for a specific purpose. For example, an easement may give a utility company the right to access a part of the yard for maintenance and repairs, or it may give a neighbor the right to cross a portion of the property to access a main road. An easement could affect your ability to use the property as you wish, so it’s important to know if an easement exists before you commit to a purchase.
