As we have discussed in a previous blog, there are many ways in which an attorney can assist you in purchasing real estate. One of the key services an attorney will provide you with is conducting a thorough title search.
A title search is an in-depth investigation into the documentation and history of transactions involving the property. It is intended to uncover any potential legal issues which could inhibit your ability to purchase the home or impact your ownership of the home after you complete the sale. Below we have outlined some of the issues which could be uncovered during a real estate title search:
Obviously, this is the best possible outcome for any prospective home buyer. Your goal is that your title search will find absolutely no issues of note—known as a “clean” title. This will probably be the case for a majority of home buyers, but you can never assume that your title search will fail to uncover anything. In fact, you should normally approach the title search from the perspective of hoping for the best but planning for the worst. Prepare yourself to deal with issues that turn up on the home’s title, and if nothing does you will be pleasantly surprised.
Every home buyer must be very aware of potential liens that could be on the property. A lien is an official claim against a property by someone other than the owner as collateral and potentially payment for unpaid debts or liabilities. For example, the IRS could place a lien on a home if the owner has significant unpaid taxes. Additionally, all mortgage companies place a mortgage lien on a home when the owner finances with them. What this means for you as a buyer, if your title search uncovers a past lien, is that another party has a right to that property and you will have to take steps to have the lien released if you are going to purchase the home. Uncovering liens from previous owners is most common when purchasing foreclosures.
False, Illegal, or Inaccurate Documentation
There are numerous issues that could be discovered regarding the documentation of the home. Documents and records that were submitted to local housing authorities could be found to be forgeries or even have typos and other errors that invalidate them. It may seem unlikely, but clerical and filing errors occur all the time, and they can have a major impact on your ability to purchase a home, and even your legal ownership of a home if you purchase it and the issue is uncovered after the fact. These types of issues must be uncovered and corrected as soon as possible.
Easements and Survey Issues
Generally speaking, an easement is a legal right of way on a property. For example, the property may include a utility easement allowing the city or county to access and perform work on certain parts of your land, or your driveway may include an easement allowing another adjacent property owner to utilize it to access his or her own property. A previously unknown easement that is uncovered in the title search could severely impact how you are able to utilize and enjoy the property if you purchase it. Additionally, not all land surveys are created equally. The title search could uncover multiple surveys displaying different results regarding the property boundary of the home.
If you are seeking to purchase a home from someone who inherited the property, the title search could discover other heirs who share the claim to the property and have not agreed to sell it. Similarly, the search could uncover a previously undiscovered will ceding the property to heirs who were unaware of their claim. An inheritance issue could become a major roadblock to your ability to purchase the home.
This is just a brief sample of some of the problems that can arise and be uncovered in a title search. However, it is far better to discover these issues BEFORE you purchase a home rather than after. If you are considering purchasing real estate, please contact the Matus Law Group today and let us guide you throughout the process, including conducting an efficient and effective title search.