When purchasing a new property, it is important to conduct a title search before signing any contracts. During this process, public records are reviewed to determine the rightful ownership of the property and identify any financial burdens, such as unpaid property taxes or mechanics liens, that must be resolved before the sale can continue. Doing so ensures that you have all the information you need to make an educated decision about the purchase and will not be held liable for any ownership or financial concerns related to it.
Hiring a Title Agent
The documents used to perform a title search are public, meaning that it is feasible to conduct one yourself. However, without the proper training, it is likely that you will miss some important documents that could present a major liability in the future. Hiring a title agent to assist you can be instrumental in ensuring that the search is completed as thoroughly as possible, helping you to protect your investment and retain control of your home should a discrepancy in ownership or other issue present itself.
Checking Tax Assessor’s Records
Gathering information about the current owner of the property and the property itself helps you locate the property’s current and past deeds. Looking at property tax records can be helpful in this endeavor. Most of these documents are located at the tax assessor’s office in the county or city in which the property is located, and many are available online. If your office does not have an online search option, call the office and ask about how to access the documents, as each office may have its own system. A property tax record will provide you with the parcel number, lot number, general description, and history of both paid and unpaid taxes for the property.
Searching for the Property Deed
The information found in tax assessor’s records will help you find the deed to the property. Deeds are typically available online. Find the most recent deed, which will have the name of the owner of the property and should match the name of the person from whom you are purchasing it, as well as previous deeds from the past 50 to 70 years. Each deed will reference previous deeds, maps of the property, and any liens. Gathering an extensive history of ownership in this way ensures that the chain of title, or series of owners, has been passed down correctly.
You may need to conduct your search in person. Call ahead to ask about what information you will need and how to begin the search process, and bring the information found through the tax assessor’s office. This will help you find the first deed, which will reference the previous deeds.
Establish the Chain of Title
Beginning with the most recent deed, ensure that the person who bought a property is listed as the seller when the property changes ownership; listing this information in a chart can help you more easily determine proper transfer. If you find a break in title, meaning that the seller listed on one deed is not listed as an owner, speak with a real estate attorney to determine the risks associated with purchasing the property.
Conduct a Tax and Lien Search
After determining the chain of title, you can move on to the next phase of your title search, which involves checking for liens, judgements, and other financial risks associated with the property. The tax assessor’s records you discovered in the first stage of the search should contain information about any outstanding taxes or special assessments, like liens, both of which can become your responsibility after purchasing the property. In some cases, excessive past-due property taxes can give the state cause to put the property up for sale regardless of the current owner.
If there are any unsatisfied judgement liens against the property, the title will be considered defective. The seller must eliminate the defect before the property can be sold, as buyers will otherwise be unable to secure financing for the property. If you discover a lien, ask the seller to contact the creditor to either pay off the lien or ask for it to be removed if it has already been paid. Judgement liens can be found in the same office as the deeds.
Other Financial Restrictions
Outstanding mortgages, unpaid taxes, and other restrictions can reduce the value of the property and put you at risk of losing it after purchase. While it is not your responsibility to rectify liens and other financial commitments before purchasing a home, a real estate attorney can advise you on the risks you can expect and steps needed to purchase the property.
If a seller is unable to satisfy a judgement lien or otherwise meet their financial commitments, the buyer may be able to make the necessary payments in exchange for a reduced purchase price. Buyers may also be able to force sellers to pay off liens if they purchased the property for cash and was not aware of the liens prior to the transfer of title.
Hiring a Title Search Company
Speak with Mathis Title Company for more information about performing a title search on a property. The company’s founder, Robin Mathis, has extensive experience in both the legal and real estate industries, giving her a comprehensive perspective on how both fields impact your home buying or selling experience. In addition to title searches, the company can assist with refinancing negotiations, settlements, contract review and preparation, and mechanics’ liens.