A title search is a crucial part of any real estate transaction. It involves examining public records to verify a property’s legal ownership and uncover any potential issues that could affect its sale. This comprehensive guide will take you through the steps of conducting a title search, from gathering necessary information to resolving discrepancies found during the process. By understanding these steps, you can ensure a smooth and secure property transaction.
Gathering Necessary Information for a Title Search
Initial Documentation
Before starting a title search, gather all relevant documentation related to the property. This includes:
- The property address: The full address of the property, including the city, state, and ZIP code.
- Legal description: A detailed description of the property’s boundaries and location, often found in the deed.
- Parcel number: Also known as the assessor’s parcel number (APN), this unique identifier is used by local tax assessors to identify properties.
- Owner’s name: The current owner’s full name, as recorded in the property records.
- Purchase agreement: The contract between the buyer and seller that outlines the terms of the sale.
Additional Information
Depending on the complexity of the property and transaction, you might also need:
- Previous deeds: Copies of past deeds to establish a chain of title.
- Surveys and plats: Maps showing the property’s boundaries and physical features.
- Mortgage documents: Information on any existing mortgages or loans against the property.
Reviewing Public Records and Land Records
Accessing Public Records
Public records are maintained by various government agencies, including county clerks, recorders, and tax assessors. These records are essential for verifying ownership and identifying any issues that could affect the title.
Key Sources of Information
- County Clerk’s Office: Holds records of deeds, mortgages, liens, and other legal documents related to property ownership.
- Tax Assessor’s Office: Provides information on property taxes, assessments, and any unpaid taxes that could result in a lien.
- Recorder’s Office: Maintains official records of all real estate transactions, including deeds and mortgages.
- Court Records: May contain information on legal disputes involving the property, such as foreclosure proceedings or judgments.
Online Resources
Many public records are now accessible online through government websites and databases. Utilizing these resources can save time and provide immediate access to essential information. However, it is often necessary to visit the physical offices to obtain complete records.
Identifying Property Owners and Any Liens or Encumbrances
Verifying Ownership
The first step in the title search is to verify the current owner of the property. This involves:
- Chain of Title: Reviewing the historical sequence of property ownership transfers to ensure each transfer was legal and properly recorded.
- Deeds: Examining the most recent deed to confirm the current owner’s name and the legal description of the property.
Identifying Liens and Encumbrances
Liens and encumbrances are claims or restrictions on the property that must be resolved before it can be sold. These include:
- Mortgages: Outstanding loans secured by the property.
- Tax Liens: Unpaid property taxes that could result in a lien.
- Mechanic’s Liens: Claims by contractors or suppliers for unpaid work or materials.
- Judgments: Court-ordered claims against the property owner.
- Easements: Rights granted to others to use a portion of the property, such as for utilities or access.
Reviewing Easements and Restrictions
Easements and restrictive covenants can significantly impact property use. Identifying these involves:
- Reviewing deeds: Easements are often recorded in the deed or as separate documents.
- Survey maps: Plats and surveys can show the location and extent of easements.
- Subdivision maps: For properties in subdivisions, reviewing the original subdivision map can reveal easements and restrictions.
Verifying Legal Descriptions and Boundaries
Importance of Accurate Descriptions
The legal description of a property is a precise way of defining its location and boundaries, often using a metes and bounds system, lot and block system, or the Public Land Survey System (PLSS).
Reviewing Legal Descriptions
- Deeds: The legal description is typically found in the property deed. Ensure it matches the description in previous deeds and public records.
- Survey and Plat Maps: Comparing the legal description with survey maps and plats helps verify the boundaries and identify any discrepancies.
Confirming Boundaries
- Physical Inspection: Visiting the property to confirm the physical boundaries can help identify encroachments or discrepancies not apparent in the records.
- Surveyor’s Report: Hiring a professional surveyor to verify the boundaries can provide an accurate and legally defensible description of the property’s limits.
Resolving Any Issues or Discrepancies Found During the Title Search
Identifying Common Issues
Common issues found during a title search include:
- Unresolved Liens: Existing liens that must be paid off or settled before the property can be sold.
- Incorrect or Missing Information: Errors or omissions in public records that need correction.
- Boundary Disputes: Discrepancies in property boundaries that may require legal resolution or a new survey.
Addressing Liens and Encumbrances
- Paying Off Liens: The seller must resolve any outstanding liens, often using proceeds from the sale.
- Negotiating Releases: Working with lienholders to release claims on the property, sometimes requiring legal assistance.
- Easement Agreements: Formalizing or renegotiating easements to ensure they do not hinder the buyer’s intended use of the property.
Correcting Record Errors
- Amending Records: Submitting corrected documents to the appropriate government offices to amend public records.
- Affidavits: Providing sworn statements to clarify or correct information in the records.
- Quiet Title Action: In cases of serious disputes or unclear ownership, a quiet title action can be filed in court to resolve issues and clear the title.
Legal and Professional Assistance
- Real Estate Attorneys: Legal experts can provide valuable assistance in resolving complex title issues, ensuring compliance with local laws, and representing parties in court if necessary.
- Title Companies: These companies specialize in conducting title searches, resolving issues, and providing title insurance to protect against future claims.
- Surveyors: Professional surveyors can resolve boundary disputes and provide accurate property descriptions.
The Role of Title Insurance
Protection Against Future Claims
Title insurance protects buyers and lenders from financial loss due to title defects not discovered during the title search. It covers legal fees and other costs associated with defending against claims.
Types of Title Insurance
- Owner’s Policy: Protects the buyer’s equity in the property and remains in effect as long as they own the property.
- Lender’s Policy: Protects the lender’s interest in the property and covers the loan amount until the mortgage is paid off.
Obtaining Title Insurance
Title insurance is typically purchased during the closing process. The title company will issue the policy after completing the title search and resolving any issues.
Conclusion
Conducting a title search is a fundamental step in any real estate transaction. By gathering necessary information, reviewing public records, identifying property owners and liens, verifying legal descriptions, and resolving discrepancies, you can ensure a smooth and secure property transfer. Understanding the role of title insurance further protects buyers and lenders from potential future claims. Whether you are a buyer, seller, real estate professional, or attorney, mastering the title search process is essential for successful real estate transactions.
