If you’re an aspiring home buyer or real estate agent involved in the homeownership process, you’ve probably heard the phrase “property title search” tossed around as part of the process. Confused as to exactly what a property title search is? Don’t worry. You’re not alone. There are plenty of real estate terms that might seem foreign to home buyers (especially first-time home buyers), and this is one of them.
Let’s start off with this fact: a property title search is one of the essential parts of the home buying process, key to getting the entire homeownership sale completed for both the buyer and the seller. Executing a property title search properly and promptly will help to make the transaction as smooth as possible.
In this article, we’ll break down exactly what you need to know about a property title search – everything from exactly what a title search is to why it is essential for the process.
What is a Property Title Search?
First, let’s tackle the big question: what, exactly, is a property title search? You can find most of the clues to its definition within the phrase itself. Put simply, a property title search identifies the exact party that owns the property being bought or sold, along with all the financial complications behind it.
At a completion of a property title search, all parties involved in the transaction will have a crystal-clear definition of the property’s true and rightful owner – along with any liens, debts, or other legal complications that may be integral to the sale.
Why is a Property Title Search so Important?
Think of a property title search as a flashlight, shining a powerful and clear beam onto the financial history of the property. Fundamentally, the transaction between the buyer and the seller should result in the transfer of the house’s deed from one party to another. That swap is at the heart of every real estate deal.
A property title search helps to identify anything that might cause a snag in the process. Frequently, these “snags” might catch both parties completely unaware. Sellers might not have the legal right to sell the property at all, for example, or might have liens, taxes, or other debts still existing on their property. Buyers need to be aware of all of these potential complications in order to protect the legality of the sale – and their own legal obligations in the future.
So, a property title search is a critical step for all parties involved – from the buyer purchasing the home to the seller putting it up for sale, along with the mortgage lender, local government organizations, and even the real estate agent. Making sure that the property gets owned “free and clear” is something all parties need to strive towards before the process gets completed.
When in the Process Will a Property Title Search Get Done?
Owners of a house can do a property title search at any time they want (it might be a good idea to have it done before the sale process starts. However, when it comes to the homeownership process, there is generally an accepted time when the property title search will get done. Once the buyer and the seller sit down and actually agree on the price of sale for the house, the property title search will begin. That period of time between when the transaction gets agreed upon, and the actual closing of the deal is when the property title search will get done.
Who is Actually Responsible for Getting the Property Title Search Done?
This is where it is critical to get the services of a veteran, professional real estate agent. The best real estate agents can help to guide you through the property title search process (along with many other things). In the homeownership process, the real estate agent, buyer, seller, and lender will be able to hash out many of the property title search details. During this, they’ll figure out which party will be responsible for the title search costs (it’s usually not that much money) and figure out who will actually do the title search. In many cases, the real estate agent or lender will have an existing, helpful relationship with a title search company or other specialized resources to do the actual search.
Note, too, that it is possible for an individual to do the title search themselves; those owners intricately involved or familiar with the real estate finance world may opt to do this themselves. However, for most homeowners, the time commitment – searching through those documents takes quite a while – and the risk of legal problems that come along with doing your own property title search won’t make it worth the effort.
Our best advice? Leave the property title search for the professionals; you’ll save yourself plenty of time and a lot of effort, and you’ll also get the assurance that everything is legally secure once you’re finished. This process can be a long (and very involved) one; cutting down on as many headaches is possible is key to maintaining an even keel throughout the homeownership schedule.
What Will a Property Title Search Look For?
The property title search process is an extensive investigation of everything related to the financial history of the property that’s getting sold. The investigative process will take a top-down look at a wide variety of items on the property, including:
- Any liens or debts that the property owner currently has against them. For buyers, this is an incredibly important part of the process; if some judgments against the property do not get settled before the closing, these debts could become the responsibility of the new owner. That’s a situation that you want to avoid. This is a “big tent” type of examination; it will look at everything from pending divorce judgments to bankruptcies.
- A deed history of the property, making sure that there’s a clear transfer of ownership from one party to another
- Different local issues that may prove to be a problem for the sale – everything from permits to code violations and other legal situations that could prove to be a problem for the owner.
- Any other pertinent documents, titles, permits, or paperwork that can shine a light on the financial history of the property before the closing date.
How Long Does the Property Title Search Last?
As you can imagine, the property title search is an involved process. This can require picking through decades worth of documents and records – even going back to when the property first became established. That means that a properly-done property title search can take up to a few days (for newer houses) or a few weeks (for older homes, or ones with a complex series of financial transactions behind them).
Once that’s done, the property title search organization (or individual) will deliver a report that details the history of the property and points out any problems. From there, all parties can work to resolve any outstanding legal issues before the closing gets finished.
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