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What Can Title Search Reveal And How It Works?

December 29, 2023

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.

What Is A 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:

  • Guaranteeing that the person making the property offer is legally permitted to sell it.
  • Exposing the presence of any easements that permit the use of the land without the owner's consent or covenants that restrict its use. These might apply to utility firms that occasionally need access to wires or pipes, or they might apply to the owners of nearby parcels without road access. (While there might not be much you can do to prevent legal easements, you should be aware of them when purchasing real estate.)
  • Determining whether the property has any outstanding debts from previous owners, court orders, tax responsibilities, or other legal or financial "defects" that could become your responsibility if the accountable owner doesn't take care of them before the sale.

Why Perform A Title Search?

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.

What Can a Property Title Search Reveal?

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.

conducting a title search

How To Conduct A Title Search

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:

  • Determine which municipality has property records for the given address. The county government is often in charge of keeping these records, but occasionally the state, municipality, or city where the property is located is also in charge.
  • Check to see if property records are accessible online. For decades, numerous towns have been digitally documenting transactions, and an increasing number are scanning their older records to enable web searches. The whole title history of the property in issue might be accessible digitally if it was constructed during the period of digital records. In cases where digital record keeping is unavailable or for older properties, it may ask to review hard copy records and obtain copies of pertinent papers.
  • Using the current owner's name, find the most recent title deed for the property. Meanwhile, you can use the full legal name of the organization to find a property owned by a company or trust.
  • Review the title. Be sure to include the date, the grantor's name (the seller who gave the deed to the grantee, the present owner), and any descriptions of liens or easements linked to the title. Since deed documents don't follow a conventional format, understanding their organization and flow may need some work. Usually, the initial section of the deed names the grantor and grantee, and the signatures of both parties are placed at the end.
  • Check local court and tax records. To see if the property is subject to any pending court orders or tax liens, look under the current owner's name and be sure to obtain copies of all pertinent records.
  • Repeat the procedure. Look for the grantor's name mentioned in the prior deed this time and find the title deed that indicates their grantee status. Check court and tax records for judgments against that grantee, and again take note of the date, the grantor, and any pertinent descriptions of liens and easements.
  • Work your way back to the owner. There can be issues with the property's history if the date record is incomplete or if names don't match from one deed to the next. It would be prudent in this situation to speak with a qualified abstractor who can help fill in the blanks and is acquainted with the local record-keeping procedures.

Bottom Line

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.

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8315 W. 10th Street
Indianapolis IN 46234

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