Title issues are often discovered only as the closing process progresses, and they always mean that things must come to a screeching halt. Not only are title issues disheartening to anxious buyers, they’re equally disheartening to motivated sellers and all the agents and middlemen involved in the time-consuming closing process. Due to the often terrible timing of their discovery (i.e., when your house is half in boxes), title issues can easily feel like a nightmare. Until issues are fixed, a home cannot be sold, so it begs the question: How do you resolve titles issues quickly, without pulling out too much hair?
Countless title issues can plague a homeowner, and each one has a unique resolution. To help you get on track to solve a title issue strategically and efficiently, let’s review the most common types of problems you may have to deal with.
Anytime your home is used as security for a debt or other financial obligation, the lender will place a lien against the home’s title. This is a well-known fact with a mortgage, but any federal, state, or local taxes you owe can also result in a lien. So, too, can unpaid contractor bills and obligations to various other parties.
In short, a lien against your home means the lender can foreclose on your home, removing you from the property and using any profits from its sale to cover your debt. Just because you have no mortgage or back taxes, that doesn’t mean you’re in the clear. Unfortunately, this issue often presents itself because of a previous owner’s unpaid debts.
If you purchased a home when the previous owner passed away, you may find that people come forward claiming to be heirs to that owner, saying they have a right to the property. They may have been missing at the time of the owner’s death or they may have been unnamed, and they may very well have a legal claim to the property if they can document lineage or present documentation.
Recording errors can also represent problems. Public records are created and managed by people, and like all people, even local officials can make mistakes. An error in a public record could impact your home’s deed and, while it could come down to a simple clerical error, even minor issues can take some time to resolve.
Every seller is required to ensure the boundaries of their property are clearly defined, which often entails hiring a surveyor. If there’s any dispute over where the boundaries are, you must address them accordingly. If the dispute involves a part of your land that has a portion of a building or structure on top of it, that can be an especially costly and complex problem to fix. With nice neighbors, the issue is easier to address.
Knowing the most common title issues is an important first step to help you understand the situation you’re in. The next thing on your list should be looking up regulations, seeking professional guidance, and getting input on the most common ways in which your title issue is resolved so you can close the deal and buy the home you’ve been dreaming of.
Title issues can be stressful, but the right help by your side can stop you from losing too much sleep. So, your next step should be finding a reputable title company in your area who can help you identify issues and present solutions.
Title companies will start by performing a title search, and if serious issues are found, they can point you in the direction of a reliable real estate attorney to help you solve them. Clearing your title will involve costs and time, but it’s a necessary step in order to sell your home and get out of the title nightmare you’ve found yourself in.
Assuming that you’ve already begun the home selling process and you have an agent working with you, it’s critical that you notify your agent of any potential title issues as soon as you’re made aware of them. If you’re tempted to not mention them and just crossing your fingers in the hope that your agent will continue showing your home and move the process along, be aware that any attempt to close will only be halted when the title issue is brought up again.
Instead of involving buyers and wasting time by trying to skirt the problem, involve your agent so you can get their professional input and guidance. Recognize that a title issue doesn’t mean they’ll stop showing your home, either, and you can still rack up a list of interested buyers to speed up the process once you get the issue sorted out.
As the homeowner, you’re in a unique position to take charge in the event of certain issues, like a lien placed against the property. If you know what to do, you can save countless hours by moving ahead yourself rather than waiting for someone to hand a checklist over to you.
- Liens: For any liens placed against the property, contact the lien holders and identify exactly what the lien is for. Ask for documentation of the amount owed and proceed to negotiate payoff terms. Once you pay off the lien, be sure to get a signed release form and file it locally to have the lien removed from the title.
- Disputes: Try to come to a voluntary resolution over any boundary disputes with neighbors. If they’re encroaching on your property, you could sell that portion of land to them, or vice versa. You can also resolve it by establishing a new boundary and both signing a quitclaim deed. If that fails, a quick title action may be required, where a judge will step in to fix the boundary issue if a voluntary resolution cannot be met.
- Quiet Title: If you have a lien you don’t believe you’re responsible for paying, if there’s a boundary dispute that isn’t getting resolved, or if your legal ownership status of the property has been brought into question, requesting a “quiet title” might be the right step. Consult an attorney for help.
This list is not exhaustive, as title issues are complex and varied, with resolutions differing depending on where you’re located and the exact nature of the problem you’re dealing with. What’s important is that you stay committed and don’t lose hope. With the right team, you can solve your title issues efficiently.
Ultimately, title issues can be stressful and tack on a lot of unexpected time to the selling and/or closing process. But if you’re facing title issues, you simply can’t ignore them. Fortunately, LemonBrew Abstract can help speed the closing process along. With title insurance, closing, and escrow services, LemonBrew makes home selling easy. Learn more today.