Title insurance is a policy type that protects the home buyer and the lender from any losses or damages. Sometimes, a property has a bad title where other people have filed claims against it, there are back taxes, outstanding liens that need to be paid, and conflicting wills. Read more about liens on this site.
Many factors are going to spoil your legal ownership of a house. This will make the title bad and cause legal complications and code violations. For example, after everything is done, you’ve discovered that the seller does not have any legal claim to the house you’re buying, and another party is disputing it.
The last things that you need are court appearances and legal battles after you’ve just parted with a considerable amount of money to buy the home of your dreams. An unexpected issue may make the title invalid, and this is where the insurance protects you. You might be asking questions like how I get started with the title search and if so, you’re on the right page.
About a Title Search
Before you go through the purchases, you need to conduct a title search and go through tax records, past deeds, and other financial transactions that lead to a specific piece of property. The purpose is to ensure that the person selling the home to you is the actual owner, and they can legally transfer it under your name without any issues.
It’s important to know that the process of a title search is one of the requirements to underwrite an insurance policy. If you want to be secured and guarded, you might want to know the things to do through Primary Abstract title insurance so the process will be fast and hassle-free. With this said, here’s how to do it.
1. Check the Records of the Tax Assessor’s Office
Gather a lot of information about the house and the current owner. You need to do this through the tax assessor’s office or the city where the property is located. The records are open to the public, and you can also try to do an online search. Everything you need to know about the tax history, general description, lot number, and parcel will be included in the official records, which will help you determine if you’re dealing with a legitimate seller.
2. Property Deed Can be Available Online
Do a quick search for the property deed online. Some states will give you free access, while others require a small fee. This is one of the fastest ways to locate a particular property’s deed. Read the most recent deed as this will contain the house’s current owner, and this should be a match to the person you’re transacting with.
- Each deed will have maps, references to the previous ones, and liens, so be sure to check them out.
- Read at least 70 years of deeds to ensure that the title was passed down correctly.
3. Visiting the Records Deeds
If the country where the home is located does not offer an online search system, you might not be able to go back far enough. This is where you may want to pay a visit to the nearest office responsible for recording the deeds in the area. After you’ve conducted a successful search, bring all the copies and records to the office of the tax assessors. Read more about an assessor in this link: https://www.investopedia.com/terms/a/assessor.asp.
-The deed book will usually give you the most recent deed. Each of them will include specific numbers and references to the previous ones and continue pulling them out until you’ve covered as far as 70 years. These tasks may be time-consuming, but this is something that will save you from a lot of problems later on.
4. Establish a Title Chain
Once you have gathered everything, move backward and check if the previous owners have passed the title without a hassle. Create charts for buyers, sellers, and the deed. Start with the most recent deed and ensure that the sellers are the buyers on the previous documents. This is a pattern that should continue uninterruptedly for the past 50 years.
When you fill in the information, you’ll know if there are gaps and if the current owners can lawfully sell the house to you. When you’re purchasing a home with a break in the chain when it comes to the title, consult an attorney first or speak with the insurance experts to determine the risks associated with this.
Conducting a Tax Research
As mentioned, search the tax assessors’ records in the area to see if there are unpaid taxes on the property. This is to ensure that the house is not currently subjected to a lien, and it would not be put on sale by the state after you’ve acquired it.
Another essential part of the process is to know whether there’s a judgment lien against the house and this is not usually included in a deed. The home acts as collateral for a debt or any money owed until this judgment is satisfied. If you discover one, consider this a defect and go to another property. Usually, the buyer who is seeking secure financing from the bank or private lenders will not be able to get the funds when there’s a judgment lien.
Many states will prohibit selling a home that has a judgment lien on it. You’ll be able to know this through checking the Clerk of Court or Registrar of Deeds. Call the insurers if you’re in doubt, and they will guide you through the process. It’s also essential to protect yourself from any title problems in the future with the best insurance out there.
