The Unsung Superheroes of Real Estate
When it comes to known superheroes, we’ll admit, Title companies aren’t exactly a household name. Going around saving home buyers from potential disasters is however, what we do. It’s true; our expertise is behind the scenes, so newcomers to the real estate market or home buyers who’ve been lucky enough to avoid a title related disaster may have never heard anything about us. That’s why most people want to know “what is it you do?” We protect buyers and lenders by overseeing and facilitating a number of important transactions during the purchase of a property. By researching and providing a title insurance policy, you’re essentially guaranteed that your property has been reviewed, has a clear title, and is free of any liens, mortgages or other unforeseen issues. In other words – once the transaction is closed, you are the official owner of the property, and there aren’t any other hidden parties that have an ownership claim to your property. In the case of a prospective purchase, a title search is performed primarily to answer three questions regarding a property on the market:
- Does the seller have a sellable interest in the property?
- What kind of restrictions or allowances pertain to the use of the land? These would include real covenants, easements and other equitable servitudes.
- Do any liens exist on the property which need to be paid off at closing? These would be mortgages, back taxes, mechanic's liens, and other assessments.
A title search is also performed when an owner wishes to mortgage their property. The bank requires the owner to insure this transaction so title companies provide Insurance based on the findings of their research.
One of the most crucial steps to closing a real estate transaction is the title search. As an investor, you need to be 100% sure that the person you’re buying from has a clear title to the property. You need to ensure that you’re getting a deed and paying the actual property owner (not somebody else who thinks they own the property, or is lying to you and claiming that they own it). Anyone can perform a title search. Documents concerning conveyances of land are a matter of public record. However it’s important to know that the information within the documents is typically not available as data format as the records are descriptions of legal events which contain terms, conditions, and language in excess of data. This basically means that there are terms and conditions existing that an untrained researcher could miss or not fully understand.
How does this kind of issue come up in the first place? There are a lot of ways; people who have inherited a property from their parents or relatives and somewhere along the way, the proper paperwork was never filed to give them the “legal right” to sell the property. Other times, people just buy properties without doing their own due diligence and then they get stuck with a property that doesn’t have a clear title. A person can actually end up with their name on the tax bill (and in some cases, even on the most recent deed) – but somewhere in the historical “chain of title” (as recorded in the county’s records) the property wasn’t transferred correctly from a seller to their buyer. Divorces that were not recorded properly are a common cause as well. Titles may transfer several times in 20-30 years and still have new errors found in the most recent title search.
It’s relatively safe to assume that your seller isn’t attempting to scam you when considering a real estate purchase but unfortunately, when a problem does come up, it doesn’t always have a quick and easy solution. Never fear, TitleQuest is here to save the day. We understand everyone has different situations so feel free to contact us today for more information!