Real estate transactions can be financially and legally taxing. One of the most crucial steps during a real estate transaction is the title search. Basically, this is the process of reviewing the public records to ensure that the property is clean and that the seller can rightfully sell it.
However, title defects are not uncommon. And overlooking them can lead to costly problems down the road. Here are a couple of problems that a title search can reveal:
What a title search can show?
Errors with the property’s public records – these can range from simple clerical, spelling or filing errors to complex ones like improper property description or missing signatures. All these can be hindrances to the sale. For instance, an anomaly with documentation can result in a lien against the property. More so, the financing company will likely have a difficult time approving your mortgage.
Undisclosed liens – talking of liens, it is not uncommon to use a home as collateral or fail to pay property taxes. If this happens, a lien may be placed on the property. And if you buy such property before the lien is settled, that debt will be on you. Fortunately, a title search can reveal this.
Missing heirs – Heirs can cause problems during and after closing the home purchase. If the property has multiple owners, then all the owners must approve the sale. If you overlook this, your rights to legally own the property may be jeopardized.
So, what is the solution to these problems?
While no one wants to deal with these problems, they are not uncommon during real estate transactions. As such, it is important that you embark on a title search from the onset. Identifying and addressing title defects can help you protect your rights and interests when investing in real estate.