The process of homeownership can frequently be a long and winding road – and a “property title search” is one of the many different detours that long and winding road can take. Put simply, the property title search is the deep dive into the ownership history of the home that a seller is selling and a buyer is buying. It’s main goal? To make sure that the person that seemingly owns the property actually has the right to sell it.
This is a critical element of any homeownership process. Normally, the property title search will take place after the seller and the buyer have agreed (in principle) on the terms of the sale; from there, the real estate agent or mortgage entity will enlist experts to pore through years – and even decades – of legal paperwork to get an accurate picture of the house’s actual homeownership.
A great deal of these property title searches will turn up nothing that will hold up the process. However, there is a chance that the property title search will turn up a snag that could delay – or even derail – the homeownership process altogether. So, what are the most common problems found in a property title search? Let’s go through the ten most common problems here:
- Problems with the boundary lines. Those little boundary disputes could snowball into catastrophic problems when it comes to the property title search. The most common problems with boundary lines? Differing surveys showing where, exactly, the property to be sold actually extends to. After all, both parties need to know exactly what they’re selling – and what they’re buying. These types of problems can also extend to the local or state level, especially if a piece of property may have something inadvertently built on land that does not belong to them. A concise and comprehensive examination of all boundary lines, surveys, and other technical disputes on this property is an integral part of any property title search.
- Bankruptcies. This is a tricky situation that could spell trouble for the new owner of a piece of property. If the seller declared bankruptcy at one point, the bankruptcy judgment on the property could even extend to the new owners. If the buyer is not careful, they might end up having to pay the judgment levied against the prior, bankrupt seller.
- An uncovered will. This is another specific situation that – believe it or not – does come up on a regular basis. When a property title search begins, the documents might uncover that the person selling it can’t actually sell it – thanks to something in a relative’s will. If a grandfather, aunt, uncle, grandmother, or some other relative technically “willed” that property to someone other than the current owner, that can disrupt the chain of ownership – and cause a significant problem with the final transaction.
- Forged documents. Another hard-to-believe situation that does come up often. With all the documents involved in homeownership over the years, there is always the chance that some less-than-forthright individual has forged a critical signature or piece of paper key to the entire ownership process.
- Liens or debts on the property. This might be the most common problem that arises during a property title search. If the seller isn’t the most financially-stable person or property – or doesn’t have all of their financial records in good standing – there’s a chance there may still be some significant liens or debts still existing on the property that may transfer over to the new owner. That means that once sold, the new owner of the property would be responsible for paying all of the amounts the old owner would be on the hook for. This is one of the standout elements a comprehensive property title search provides for both buyer and seller.
- Clerical, government, or public records errors. As the old saying goes, no one is perfect. The process of buying and selling property is a “big tent” chock-full of many different parties. That makes it all the more likely that one or more of those parties could make a paperwork error up or down the line that could derail the process. It may be as innocuous as a listing or filing error in the public records, or something big involving the real estate agency, mortgage broker, or real estate agency themselves. A thorough property title search should be able to turn up any one of these tweaks that might disrupt a successful homeownership completion.
- Other owners. This may happen to the surprise of both the buyer and the seller. The property title search could reveal that the property may have another listed owner – usually due to some other debts or liens that may exist on that property. If this happens, that party could be able to make a claim on the property and actually block the sale. A deep, thorough search of the property’s history needs to reveal all of its technical records.
- Impersonating an owner. Think this sounds like something out of a terrible novel? Well, it has happened before – and it will happen again. There are unscrupulous individuals out there that will take the name and identity of another owner to attempt to sell a piece of property to a buyer. These types of scams are not uncommon. If this happens, then the entire transaction will usually be declared void – and the buyer will lose their rights to that piece of property.
- Easements on the property. The term “easement” is another bit of vocabulary future homeowners may have to familiarize themselves with. An easement refers to the right given to another party to use a specific piece of property for their own purposes. One of the most common ones might be for allowing access to a beach, for example, or for people to use a piece of property for recreational purposes. Oftentimes easements will loop in local, state, or government agencies. These specific permissions can add yet another complication for this specific homeownership process.
- Divorce edicts. Believe it or not, a failed marriage can have tremendous repercussions on the financial stability of a household. The most common type of situation when it comes to divorce edicts and a property title search? The seller may have lost part (or even all) of the property in the divorce settlement; that means that the other, divorced party may have to be involved with that part of the process. If that party is not “looped in” or does not give their permission for the sale, the entire homeownership process might get stalled. This is an especially important thing to check for when performing a property title search.
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