You’ve found the property of your dreams, and you’re ready to sign on the dotted line to make it yours. But first you’ll want to work with a title insurance company to conduct a title search.
Sure, the property may look just fine, and maybe you even did an especially thorough inspection. But lurking in the background, unseen by the naked eye, several problems could be waiting. In fact, there are numerous common issues that only come to light as the result of a title search. And for any investor or home buyer, it’s important to realize these issues frequently exist, and title insurance can help you bypass the headaches that come with them.
Here are five problems title searches commonly uncover.
#1 Undisclosed or unknown liens. Debt from previous owners can follow a property to the next owner. It’s important for any property buyer to know if banks or other financial organizations have liens on the property for unpaid debt. A title search can uncover any unknown liens, protecting you from that unwelcome surprise.
#2 Illegal deeds. A title search can uncover problems in the chain of title, which can have implications for ownership of the property. If a prior deed was made by someone who claimed to be single but co-owned the property with an estranged spouse, the missing party would have to be found in order to proceed. That’s just one example of how a chain of title could have issues, though there are many possible illegal deeds, including deeds made by a minor, someone who is not of sound mind, or others who do not have the right to sell the property.
#3 Easements and encumbrances. When you purchase a property from someone, you don’t want to find out later that a third party has a claim to part of your property or that you can’t use the property as you intend. Sadly, it happens; but it doesn’t have to, thanks to title insurance.
#4 Heirs who are missing. When a property owner dies, their assets may become the property of their heirs or someone named in their will. But imagine the difficulties encountered when an heir is missing. It’s also relatively common to encounter situations where a parent passes away without a will, and their children live on the property after their parent’s death without settling the estate. Needless to say, there are situations where a seller simply doesn’t have the legal right to sell. A title search will uncover cases like these.
#5 Public records errors. These can include inaccurate land descriptions, typos, errors in legal descriptions, and inaccurate data. Such discrepancies can lead to big headaches on both sides of a property sale and can even compromise your ability to use the property as you intend. A thorough title search can uncover any discrepancies so you can move forward with confidence.
Purchasing a property can be one of life’s great joys: an opportunity to build equity, establish a business or make a house your home. Title insurance can help give you peace of mind that the thrill of your purchase won’t be tainted or ruined entirely by hidden title problems.