What is a Title Search?

If you’re preparing to buy a home, you can expect to embark on a variety of legal processes to make sure your purchase goes smoothly. One of the most important parts of the closing process is the title search. You may have heard of a home’s title before, but buyers need to know what a title search is, why it’s necessary, and the role it plays in the home buying process. Read on to learn everything you need to know about a title search as a buyer.

What is a Title Search?

A title search, also known as a property title search, examines public records associated with the property being sold. The goal of the title search is to evaluate these public records to ensure there are no major legal issues. The findings of the title search ultimately confirm whether or not the owner is qualified to sell the home.

Throughout the buying process, the seller you and your agent are working with needs to be legally qualified to sell the home. Just because they own, or say they own the house, there are still legal implications that make this untrue.

The title search process confirms the status of the seller by checking for claims, liens, limitations, tax obligations, and more on the home that could prevent the owner from selling it if other entities or individuals may have a claim to the property. The process of the title search protects the buyer by ensuring they can proceed with the purchase of the home.

The title search also helps protect the seller by making them aware of any potential claims or issues with their ownership status of the property. Moreover, the title search also protects the title company involved in the purchase of the home as it confirms whether or not they can insure the transaction.

Who Performs a Title Search?

A title search is such a crucial part of the home transaction process, so who’s responsible for making sure it happens? Usually, the title company performs a title search, or it’s performed by a real estate attorney. 

When is a Title Search Performed?

As you learn more about the title search and its important role in the home buying process, you might be wondering when it takes place. A title search is a high-intent action to take; it’s not something casually done at any point in the transaction. Typically, the title search is executed during the escrow process and ordered by the prospective buyer’s mortgage lender from the title company. While this is the usual process, the title search can technically be performed at any time, by any party.

What Can a Title Search Reveal?

As we shared previously, the purpose of a title search is to reveal any potential legal implications that bar the current homeowner from selling the home. You might be wondering how a homeowner wouldn’t actually be the owner of the home. If there are financial or legal obligations contingent upon the home, such as unpaid property taxes, divorce settlements, liens against the property, or even issues with a past inheritance, this threatens the owner’s legal right to sell the home.

These can be considered claims on the title, meaning another person or financial or legal entity can be considered an owner of the home. If this is found in the title search, the homeowner you’re working with is not immediately entitled to sell the home to you. 

If the Title Search Has Negative Findings, How is it Handled?

Conducting a title search before purchasing a home is crucial to making sure you can successfully, and legally, proceed with the transaction. In the event the title search on the property you’re planning to purchase reveals claims or other legal issues on its title, it’s important you understand the findings. Work with your real estate agent and the title company to take a deep dive into the findings of the title search, implications on your purchase, and next steps you or the seller will need to consider.

Proceeding with purchasing a home that other individuals or entities can claim can get legally complicated, expensive, and time-consuming, threatening a smooth transition to comfortable homeownership. Alternatively, allowing time for the seller to correct these issues, or for further investigation to take place to confirm they’re not simple clerical errors, can add a notable delay to your home purchase.

If in doubt, make sure you’re partnered with a well-trusted real estate agent. They’ll be well-versed and have a deep understanding of how best to proceed and navigate the title search process, and help guide you through next steps. To connect with a great real estate agent in your area today, make sure you submit a request today to begin comparing the best agents in your local market.