Hello World! Welcome Friends! Every buyer and seller should get a title search, and typically, the buyer is required to do one. However, it can be beneficial for both parties to carry out a search as it can help facilitate an easier selling process and remove any issues or concerns about the property. A title search involves a thorough examination of public records to ensure that the property’s title is clear and free from any encumbrances or claims.
While most mortgage companies require the seller to complete a title search, you might not know why it’s required or be tempted to skip it to speed up the process. But this post will delve into why a title search is important and definitely shouldn’t be skipped. Not conducting a title search can lead to serious issues, such as buying a property with hidden liens or disputes over ownership, which can result in financial loss and legal complications. It’s important to remember that the cost of a title search is a small price to pay compared to the potential risks and costs associated with a problematic property title.
The fee for a title search is usually included in your closing costs and can be instrumental in determining whether or not there are any issues.
Liens
A title search is the main way of finding out if there are any liens on the property. This means that the current owner has debts with the company placing the liens, and these need to be settled. Buying a home with a lien on it can lead to complications. However, if there is one, your realtor can work with you to ensure it is cleared before ownership is transferred to you if you want to purchase. This reassurance can help you proceed with your purchase confidently, knowing that potential issues have been addressed.
Ownership
A title search will also indicate the rightful ownership of the property. If there are any disputes or their entitlements after the owner has died, then a little search can throw this up, as can any claims from sources post-divorce or either party from a relationship. You can have involved parties sign a Quit Claim Deed Form to relinquish ownership. A Quit Claim Deed is a legal document that transfers the ownership rights of a property from one party to another without any warranties or guarantees. However, you need to make sure there will be no one contesting ownership if you decide to buy, and if this isn’t clear or you’re unable to ascertain ownership, it might be best to walk away.
It is also a great way to establish ownership and ensure that the person selling is indeed the rightful legal owner of the property and is indeed allowed to sell it.
Zoning Ordinances
A title search will alert you to any zoning ordinances that might restrict how you intend to use the property. Zoning ordinances are local laws that regulate land use, such as residential, commercial, or industrial. For example, the most common issue is not being able to run a business from home, meaning if you have a home-based business, you need a new location to operate from. It’s worth knowing this beforehand so you know what you’re up against and you don’t accidentally break any laws.
Miscellaneous
Other information that can be found out via a title search includes if the owner has been declared bankrupt, meaning the title of the property is unclear, if the local electric company has the rights to install power lines over the property that prevents a clear title or if the current owner has multiple mortgages all of which need to be cleared before you take possession. Additionally, a title search can reveal if the property is part of a homeowners association, if there are any pending lawsuits against the property, or if there are any easements or rights of way that could affect the property’s use.
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