While buying a house is an exciting accomplishment, the formal process of becoming a homeowner involves several steps, from making an offer to signing papers at the closing table.
Every action you take is essential to safeguarding your future investment. Obtaining an inspection, a house appraisal, and a property title search are some of the most important steps.
To help understand how doing a property title search might protect your new house, let's examine the significance of this process.
Usually, we assume that the home seller has the right to sell the house when you purchase one. That presumption, however, may come back to haunt you if someone else knocks on your front door and has a lien or claim on the property.
To establish the true, legal owner of a piece of land, a property title search is conducted to look through public records. Any liens or claims made against a property that can have an impact on a purchase should also be found through a title search.
Discovering the property's owner is only the first step towards purchasing it. It's possible that the present owner isn't even aware of any prior claims to the title of the property. Because mortgage liens and other comparable debts, along with easements and restrictive covenants, follow the property and not the owner, you may be responsible for the debts of a prior owner.
If you choose not to have a title search performed or if the search reveals encumbrances such as unpaid property taxes, homeowners association (HOA) dues, and unpaid invoices for prior home modifications, you may be responsible for them. This is the reason that, as part of the mortgage underwriting procedure, mortgage lenders demand title searches and title insurance.
A title search examines public records about a property. To establish a chain of title and verify that a sale is the legitimate owner, an attorney or title business will typically employ several legal documents. Additionally, the title search locates any monetary or legal claims made against the property.
The Process
The expert who searches public records for titles is known as a title abstractor. To create an abstract of the title, they compile all the pertinent data and court records they can locate about a property. A chronology of all obtainable documents and transactions about a property is included in the abstract of the title.w
The abstract may contain information about the property's historical and present owners, easements that traverse it, and any relevant wills or lawsuits.
The Findings
Financial rulings against the property's owner that could have an impact on your finances down the road can be found via a title search. Liens against the home, easements, and unpaid property taxes are a few possible issues with the title. You're happily ever after in your new house could be jeopardized by outstanding claims.
Your home title search needs to show that the property is free and clear to avoid problems in the future.
Thankfully, there are ways to reduce the possibility of a title claim against a property. For instance, you can obtain a title warranty or buy title insurance.
For many house buyers, the one-time payment of a title insurance policy—which is typically between 0.5% and 1% of the purchase price of the home and included in closing costs—is worth it because it can help safeguard your ownership claim to the property.
Who Does The Title Search?
The title firm or lawyer usually handles the title search, although the lender or home buyer may also conduct this.
Should you choose to conduct the title search on your own, locations such as the county courthouse, recorder's office, and assessor's office will have the necessary records.
Allowing experts, like real estate lawyers, to manage this aspect of the house-buying process might be a wise decision. Untrained eyes may find legal paperwork confusing, leading you to miss something crucial.
How Long Does A Title Search Take?
Depending on how complicated the papers are related to a property, a title search's speed will change.
Multiple sources must be consulted to collect records for a title search, which could cause a delay if an office takes a long time to reply.
It can take a few hours or weeks for the title company Indiana examiner or attorney to go through the documents and find any unresolved claims once they are in their possession. However, title searches usually take a week or two to finish.
Old Home Vs New Home
There are usually fewer papers to look up in a newer house than in an older one. Due to its lengthier time on the market, an older home will probably have more records to evaluate. This may cause the title search to take longer.
You shouldn't rush your attorney or the title company Indiana examiner, even if it can be annoying to wait. To assist you in avoiding any future problems with the home, give them the time they need to complete their work completely.
How Much Does A Title Search Cost?
A title search typically costs between $75 and $200. Depending on the state you're buying in, the pricing may change. Upon completion of the investigation, you ought to obtain a report that is straightforward to read and highlights any encumbrances that need to be cleared up before proceeding with the acquisition.
If you conduct a title search yourself, the cost can be significantly reduced. However, this approach can take a while, and if you are uncomfortable using "legalese," you might overlook a lien or debt and fail to recognize that your title isn't free and clear. A title search will provide you confidence and peace of mind as you proceed with your property purchase, so it could be a smart idea to leave this stage to the experts and budget for the cost of title fees.
If you conduct a title search yourself, the cost can be significantly reduced. However, this approach can take a while, and if you are uncomfortable using "legalese," you might overlook a lien or debt and fail to recognize that your title isn't free and clear. A title search will provide you confidence and peace of mind as you proceed with your property purchase, so it could be a smart idea to leave this stage to the experts and budget for the cost of title fees.
Buying a home involves a long process, including a title search. And while it may take your time, money, and energy, it can help a lot, especially in avoiding bigger problems in the future.
If you're planning to buy a home and conduct a title search, we're here to help. Call us at 317-214-6023 to learn more.
Caroline Soriano