One of the steps that is done when buying a piece of real estate is a title search. While it may seem like an unnecessary expense that is wrapped into your closing costs, it is actually a necessary part to make sure that a home is free and clear to become owned by you. Here is why is a title search is necessary.
To Find Mistakes In Public Records
It is very important that all public records have been checked concerning your property purchase. These records are entered manually by a person, there there is a chance that someone made a mistake at one point. This can cause a big problem for when you try to buy a property.
For instance, the public records may state that you are able to purchase the home, but the title search discovers that a previous seller didn't have the right to sell the property. The home may not even belong to the current seller you are trying to buy from, but a seller that owned the property from further back.
To Find Liens
One aspect that can be overlooked on a home are liens. These occur when an owner has a debt they cannot pay back, and the home was used as collateral. Even if you purchase the home, the property is still considered collateral in the previous exchange. You would then inherit the debt, and could lose the home if the debt is not paid. Think of it as buying a property from another player in Monopoly, and why you cannot buy a property that has an existing mortgage on it.
To Find Unknown Heirs
One legal process that can be quite complicated is probate. If the lawful owner of a property was never notified of their inheritance, they would technically own the property. This is true even when the current owner has been paying a mortgage and the property taxes for quite some time. An original heir has the right to get the property back once you buy it.
To Find Land Survey Issues
A title search will also help clarify where the property is technically located. There may be an existing fence on the land, but that doesn't mean it is where the property line is located. Finding out the correct information will help avoid a dispute down the road with your neighbor. By the end of the process, you'll know exactly what land you are buying.Share