Why Title Searches Are Crucial for Any Property Transaction

Purchasing real estate requires more than just paying the sales price and fulfilling certain regulatory and lender requirements. To complete the transaction, and truly own the subject property, the buyer must take title to it.

Title is defined as the collection of rights that come with the ownership of a property, such as one’s right to use it, access it, and/or modify it. What these rights specifically entail, and who legally has these rights, is precisely what a title search seeks to uncover.

When a buyer purchases a property, it would seem safe to assume that the seller owns the property. However, there is no way of really knowing this until a thorough search of the public records is made to find legal recognition that the seller owns the property and has a right to transfer it. This entails going through the entire record of previous deeds, tax records, and other financial transactions that have been linked to it. Known as a “Chain of Title”, this information is basically a history of the ownership of the property, including who has transferred it and when.

A buyer also won’t know what sorts of rights they have to that property until they carefully examine what the official records show. Perhaps the most essential right is that of exclusive possession, which basically means one is the rightful holder of that property. Other rights may include the right to access the property, the right to partition the property, and the right to an access easement (such as a driveway).

If any of one these rights are defective, ambiguous, or missing, the buyer will quickly run into problems with their new property – imagine, for example, having the right to possession without the right to actually access the property. With a rigorous title search, any such issues can be discovered and resolved accordingly. Otherwise, any problems with the title that emerge later on will become the new owner’s burden to shoulder, usually at great financial cost.

Another critical element of any effective title search is a judgment and name search, which identifies any unsatisfied legal judgments against the seller and/or a previous owner. Judgments are liens against the property of a debtor that serve as security for any money owed under the judgment. A name search is a way of ensuring that any judgments that turn up actually apply to the seller in question, rather than someone with a similar name (for example, if the seller is “John Smith” and it is discovered that there is judgment against someone with that name, a name search will help to identify whether it is the same person).

There are plenty of other issues that will need to be searched for prior to closing the real estate transaction. When the buyer takes title to a property, they not only take with it the bundle of rights associated with the property, but any unpaid taxes, liens, or special assessments that will then become their responsibility to resolve. A professional title company will conduct special tax and lien searches to make sure the subject property is clear of these issues.

To learn more about our comprehensive title services and settlement solutions, contact Marina Title at (305) 901-5628 or info@marinatitle.com