When you are in the process of buying a home, you already have a lot to think about. From whether the neighborhood is ideal for you to how the price tag will impact your financial future; therefore you may not have considered whether the home’s title is also clean.
A title search can help you to understand the condition of the home on paper, including who it has been sold to in the past and whether there are any debts outstanding that you may be responsible for if you complete the purchase. Here are some of the reasons why a home title search is worth your time and investment.
What Is A Title Search?
A home title search on a property is an investigation of public records related to the property to establish who owns the title and, therefore, whether the person selling the house is the rightful legal owner. It also determines whether there are any claims, liens or other issues that could lead to problems for you later.
This task is usually ordered by an attorney or title company, and performed by an abstractor. To do a title search, the abstractor examines public records regarding the property including sales transactions, surveys, easements, wills and lawsuits.
From the relevant documents, they will create an abstract of title, which chronologically summarizes the legal information about the property and may list any previous and current owners in a chain of title. The process generally takes approximately one to two weeks, though it may take more or less time depending on how quickly various offices respond and the age, and by extension, the number of documents relevant to the house.
How Can A Title Search Help You?
A title search is valuable for multiple reasons, including:
1. Monetary Security
The primary benefit of a title search is that it can save you money. It helps locate any financial rulings against the title owner. For example, since debts can be associated with a property and not the owner, you would be expected to pay for costs such as outstanding liens for services rendered but unpaid and any delinquent property taxes.
2. Home Security
A title search may reveal that the person selling the home does not actually have a right to do so. If this is the case and you buy the home from them without doing a title search, your home could be seized from you after the purchase since you would not have the legal right to own it.
3. Avoiding Mortgage Issues
Even if you are willing to shoulder liens or other issues that come with a home’s title, your mortgage company will not be willing to risk their investment. A mortgage company will require the assurance of clear title.
What Does A Title Search Cost?
A title search usually costs approximately $75 to $300, though this may vary depending on the state and county in which the property is situated. This cost should be considered as another necessary step in the home-buying process. Should you choose to attempt to save money and do the search yourself, know that you are taking a risk of missing something that may be critical, that a trained professional will be far less likely to overlook.
Do I Need Title Insurance If I’ve Done A Title Search?
When the title search is complete, title insurance can be another valuable protection for your home. It protects against the many unfiled claims that cannot be found against a title OR just in case the title search missed anything. Since these kinds of claims can take away your legal ownership of your new property, ensuring that you are prepared for them is very important.
Similar to a home title search, title insurance protects you against losing money due to a bad title. However, a home title search tries to find sources of a bad title ahead of time, whereas title insurance protects you against a bad title after it has become yours.
The cost of title insurance is related to the price of your house and varies by state, and it is a single purchase usually added to your closing costs.
Trust The Pros to Help You Understand Your Title’s Potential Issues
If you are preparing for a home title search, understand that this small investment now can be critical to your long-term financial security. The experts at Mathis Title Company would be happy to help you navigate this process. Contact our office to learn more or to schedule an appointment to protect your property.