When buying a home, it's wise to conduct a property title search, which might reveal any financial or legal entanglements associated with the property. If you're financing the purchase, it's usually mandatory. This is because, in real estate transactions, liens on a house or other unresolved title issues must be addressed, protecting both buyers and their lenders.
If you want a deeper understanding of what it's about, you can check the following resources:
Nonetheless, here are some basic things you need to know about title search.
A title search looks up public records to trace the ownership of a piece of real estate, identifying the buyers and sellers over the property's lifetime. Some of its objectives are:
The main purpose of property title search is to ensure that a property is free of liens, which are legal claims made against it due to unpaid bills, unpaid taxes, or other financial responsibilities.
This is why mortgage lenders typically demand them. The revenues from the sale of a property must be utilized to settle any legitimate liens. In a real estate transaction, the seller usually bears the responsibility but as the new owner, you may also become the beneficiary of any lien that is tied to the property and isn't evident at the time of sale.
In another sense, the true cost of the house to you might be the purchase price plus the total amount of any liens you inadvertently take on. Such a surprise is avoided with a property title search.
While fraud and forgery are undoubtedly possible, most title flaws discovered by property title searches are the result of harmless errors. Due to the mistakes made by courts or municipal clerks or the lienholder neglecting to notify the debt's discharge, some liens continue to exist even after the original financial obligation has been satisfied.
Although they are frequently easily resolved, they must be addressed before the lenders give the final loan approval.
Some cases that become more problematic are when a seller who inherited a home is not aware of a lien placed one or more generations ago and needs repayment during the selling process.
A comprehensive property title search can uncover any liens that may be attached to a property through the dozens of legal procedures available. The following are a few of the most typical lien kinds that may appear:
Mechanic's Lien: If your home is undergoing significant construction, it is customary for the contractor to file a mechanic's lien, which establishes a claim on the property to protect them from unpaid labor and material charges. The contractor should get the lien released once you pay for the work, but that doesn't always happen. Mechanic's liens also usually have built-in expiration dates, but selling the home before the date can hinder the sale.
Tax Lien: Homes whose owners neglect to pay their property taxes may be subject to liens from municipalities and other taxing authorities, including school, fire, sewage, and water agencies.
Overdue Homeowner Dues: If a homeowners association governs a house or condominium, the association may place a lien on the property to recoup past-due assessments or other costs. Usually, these need to be resolved during the selling process.
Spousal Or Child Support Lien: Court-ordered spousal or child support may be the subject of a lien placed against the noncompliant parent if the parent is unable to pay the required amount.
Civil Judgment: This happens when parties that win compensatory or punitive damages in civil litigation may bring claims against the other party's real estate and other assets.
Your lender will probably need you to commission a property title search from an abstractor -- a professional service provider whose price is usually included in your closing costs if you're financing a home with a mortgage.
It may be advisable to leave the work to the professionals because title search fees (which usually range from $75 to $200, depending on the prevailing rate for your area and the complexity of the required search) are not very expensive when you take into account the cost of a home and the possible expense of undiscovered title flaws.
However, anyone can perform a property title search because they are based on public records. This is the method to follow:
A property title search is necessary because title defects might cause delays or failures in acquiring your real estate or leave you with a home that has unresolved legal claims against it.
Doing it might be daunting, but still, other than being required by the mortgage lender, a title search can add the peace of mind you need in case of a problem with your property.
If you need reliable title services, such as title search for your property, our team at IndyLegal is here to help!
Call us at 317-214-6023 to get started.