What is a property title search? Protecting your new home
A title search is one of the most important steps you can take to protect your investment when buying a home. This comprehensive guide will explain what a property title search is, detail the process involved and highlight why it’s essential for homebuyers.
What is a title search?
A title search is an in-depth examination of public records to verify the legal ownership of a property and uncover any potential issues that might affect your ownership rights. This search is essential to confirming the seller has the legal authority to sell the property and there are no hidden claims or liens that could jeopardize your investment.
Who conducts a title search?
A title search is typically conducted by a title company, a title agent or a real estate attorney. These professionals have access to public records and databases that allow them to review the history of a property’s title and who owns it.
What is the main purpose of a title search?
The main purpose of a title search is to protect your ownership rights. It ensures who the current owner is and that the house title is free and clear of any legal encumbrances, giving you peace of mind in your purchase.
Examples of what a property search could reveal and how it can potentially limit your use of the property include:
- Easements: Easements are rights others have to use a part of your property for specific purposes, such as utility companies needing access to power lines. Easements can range from simple to complicated and could affect your property or its value.
- Encroachments: Encroachments are situations in which a neighbor's structure, like their fence or garage, may encroach onto your property without permission. They can be accidental or purposeful, but are essentially cases where parties aren’t staying within their property’s boundaries.
- Property taxes: You still need to pay property taxes after you pay off your mortgage for as long as you own the property. If there are any unpaid or outstanding property taxes on the property you’re looking to buy, these could become your responsibility once you acquire it.
- Outstanding mortgages: Previous owners may have had multiple mortgages or missed their mortgage payments, and any unpaid balances could still be attached to the property.
- Legal disputes: There might be ongoing legal disputes over property boundaries or ownership of the property you’re attempting to purchase. This could affect your ability to buy, use or sell the property in the future.
Identifying these problems early, especially before finalizing the purchase of the property, allows you to address them before you run into any legal issues after you close on your home.
The title search process
When it comes to property title searches, most title companies will follow these steps to ensure the property you’re looking to finance is in good shape and that your interests are protected:
- Ordering a title search: After your offer has been accepted, your lender or real estate agent will typically order the title search. This search is crucial in the early stages of the buying process to uncover any issues that need to be resolved before closing.
- Conducting the search: The title company reviews various public records—including deeds, tax records, land records and court documents—to check for any potential issues. This step involves establishing a "chain of title" to ensure there are no breaks or disputes in ownership.
- Reviewing the findings: Once the title search is complete, a preliminary title report is issued, which will outline any outstanding legal issues or concerns. You and your lender will review this document in full to ensure the property is free from any encumbrances that could affect your ownership.
- Resolving title issues: If the title search reveals any issues, such as unpaid liens or legal disputes, these must be resolved before you can proceed with the purchase. Your title company or real estate attorney will work to clear these issues to ensure a smooth closing process.
- Finalizing the search and acquiring title insurance: After clearing any issues that may have been identified in the preliminary report, you’ll be charged a one-time fee for a title insurance policy, which is issued to protect you from any future claims on the property or potential title defects that weren’t discovered during the initial search.
Title search process: New vs. older homes
The title search process can differ in complexity depending on whether you’re buying a new or older home. New homes generally have fewer previous owners, resulting in a simpler title search. Older homes, on the other hand, may have a more complex history, requiring a more detailed examination.
How much does a title search cost?
The cost of a title search typically ranges depending on a number of different factors like the property’s location and complexity. These costs are usually included in the closing costs of your home purchase. It's important to factor in these costs when budgeting for your home purchase to ensure you avoid any surprises at closing.
In summary
A property title search is a vital step in the mortgage process that protects you from potential future ownership issues. This thorough examination of public records confirms the legal ownership of the property and identifies any encumbrances—such as liens, easements or other types of legal disputes—that could affect your ownership rights.
At Chase, we’re committed to guiding you through every step of the homebuying process, including ensuring a clear and secure title. Connect with one of our home lending experts to learn more about how we can help make your home purchase smooth.
Title search FAQs
How long does a title search take?
The length of time for a title search can vary based on the property’s history and the efficiency of the local records office. Newer homes typically take less time, as they don’t have as much history or as many property owners as older homes do, but this all depends on their location and any issues that may be attached to them.
What should I do if my title search finds an issue?
As mentioned above, if your title search uncovers an issue—such as a lien, claim or other type of discrepancy—you should consult your title company or real estate attorney as soon as possible to resolve the issue before you close on the home. If the issue is significant and can’t be resolved, you may need to negotiate the terms of your purchase or, in some cases, walk away from the property. Make sure to talk with the professional handling your title search about your options.
How to do a title search on a property?
While it’s possible to conduct your own title search, it’s generally not recommended unless you have expertise in this area. Title searches require navigating complex legal documents and records, which are often stored in various locations. A professional title company or real estate attorney can conduct the search more efficiently and accurately, reducing the risk of missing crucial details that could lead to future legal or financial complications.
