After searching for a home to find the perfect property, you need to do another search. It’s a title search. Finding properties might not be as exciting as dreaming about browsing or moving in, but it is an important step in real estate transactions and can impact your purchase if a question arises. Here’s what you need to know:
What is the title deed?
Title deeds are terms used to describe the rights of the owner. It’s not a certificate-like document, but “refers to the concept of ownership,” says Megan Hernandez, director of marketing and public relations for the American Land Ownership Association.
When buying a home, you need to make sure that only the seller can claim ownership. This ensures that the property has no other claims or liens and that the seller actually has the right to sell your home to you first. This is where the title search comes in.
What is a title deed search?
Property rights inquiries are free from claims, mortgages, or property issues that a rights firm or lawyer may examine public records and claim that another person or entity has an interest in the home. This is the confirmation process.
“This study is being done to ensure that we have the tradable rights to real estate, so that the burden does not affect the property rights of the buyer,” said a Roswell, Ga. Company. Cook & James closing attorney Sarah Stiggen explains.
Stitgen says title research is essential for real estate transactions that require title insurance. This includes homes purchased with a loan, as mortgage lenders must seek title to fund the loan.
Landy Liu, general manager of home insurance, property insurance and escrow at Better.com, said, “It also protects the lender.”
Who completes the title search?
A lawyer or securities firm usually performs a title search that begins after a contract is entered into between the seller and the buyer. However, the steps required may vary from location to location.
“In New York, the investigation is being conducted by an independent rights firm,” said New York City real estate attorney Greg Maybaum. “Once the contract is signed, the buyer’s lawyer usually orders a title investigation and either the lawyer or the title company provides the completed report to the seller’s lawyer. It is the seller’s lawyer job to manage and resolve the title issue. “
A company or lawyer usually conducts an investigation at the county or local government office where the property is located. Since most of the required documents are available online, researchers no longer have to go to the office to perform a search.
“This person is considering many sources related to real estate,” says Susanne Hollander, lawyer and professor of real estate at Florida International University.
• County land register
• Property plate
• privileges (federal or state)
• Divorce case
• Bankruptcy court files
• Homologation offers
• Construction mortgage
A thorough investigation of the property should include details of real estate mortgages, road and sewer assessments, taxes and other property issues, Hollander said.
Once all of the information has been collected, the title company or lawyer will produce a summary report that reveals what was discovered about the title.
How long does the title search take?
Searching for a title can take hours, but more often than not it takes 10-14 days. In general, the older the house, the longer it will take to find the title. If the owner is long and has a transaction related to the property (for example, a mortgage on a house or a past real estate dispute), more work is needed to ensure that there is a clear title.
“Investigations can be done 50 years ago, or as far back as needed to identify the underlying stock and consider each subsequent transfer of ownership,” says Stitgen. “This ensures an appropriate chain of title to move from beneficiary to beneficiary, down to the current owner. “
What if the problem occurs during a title search?
A title search may reveal one or more issues with the title. Here are some common headline problems and corresponding strategies for solving them.
• Title chain break: This problem can occur if something is missing from the chain. “If Party A transfers ownership to Party B, and then Party C transfers the same ownership to Party D, the link between Party B and C is lost,” says Stitgen. “This can be solved by getting a Part B certificate to Part C, or a Part B certificate to Part D.”
• Inappropriate or missing legal description of the certificate: Depending on the nature of the error, it is usually necessary to obtain a corrected certificate from the same party in order to correct the error. “In some cases, an affidavit from a writer, preferably the party who drafted or saved the document, or someone familiar with the transaction, may be sufficient only if the error is insignificant and insignificant. Legal Explanation “Changes the nature of,” says Stitgen.
• Lack of potential benefits: If the chain of title involves a transfer through the estate, it is essential to ensure that the heir has duly waived his rights to the property. “If this is not done, we will have to obtain a certificate to release the profits from these parts,” says Stitgen.
• Public Titles: A title search can find undisclosed titles that are not publicly available to the current or previous owner. “If this is the case, research needs to be done to determine if this was accidentally left open. If this is the case, you must obtain the owner’s release of the warranty certificate. Yes, ”advises Stitgen.
• liens: Mortgages are legal or claim rights to property that are commonly used as collateral to honor debt. Title searches often identify potential mortgages on real estate. Find out if the mortgage has expired, if it may not actually be for the parties to the chain of rights, or if it is a valid lien that requires payment. Further investigation is necessary.
• Unpaid property tax: You must pay unpaid property tax or “ad valorem tax” based on the assessment of the house before transferring the property to the new owner.
According to Hollander, if any of these issues are detected, homebuyers typically have three options, depending on what the purchase contract allows:
1. Ask the seller to resolve the problem before closing.
2. Ask the seller to compensate the buyer for the cost of resolving the problem.
3. Exit the transaction and receive a refund of the deposit.
Title service fee
Buying a home has many costs in addition to the actual price of the home, and title search is added to the entire tab. There are two main costs to title services provided by title companies or lawyers.
1. Settlement Service Fee: Includes fees incurred to close the loan, such as wire transfer fees, escrow, and underwriting mortgage insurance policies. According to Liu, the latter includes the costs of searching for titles and the costs of resolving the problems encountered. Prices for doing a title search alone often range from $ 75 to $ 100 and can be paid by the buyer or the seller if the parties agree.
2. Title Insurance: “Title insurance ensures that the person who buys or refinances a home is the rightful owner of the property,” says Liu. “The premium is a one-time commission paid at the end of a transaction ranging from 0.5% to 1% of the purchase price. Since it is a percentage of the purchase price, the premiums may increase as the loan amount increases.
Can I search for titles myself?
Anyone can search for property records through the county clerk’s office. In addition, there is no law against searching for the property yourself. However, experts strongly recommend that you do not try to rank the details of the real estate title yourself.
“To conduct a title investigation, you need to know the real estate requirements and privileges and be able to navigate the files of various courts. Do this unless you have experience due to the complexity of records and indexing. Not recommended, ”said Patti DeGennaro, Senior Director of Operations and Process Specialist at Title Alliance, Ltd. in Pennsylvania Media.
“If you want to purchase property insurance, it is not enough to do the property investigation yourself, as the title insurance company does an investigation and an expert investigation before issuing the policy. insurance. I ask for advice. ”
Anyone can search for property records through the county clerk’s office, but experts are strongly advised not to attempt to classify property rights details on their own.