Understanding Real Estate: What is a Title Search?

A title search is an important part of a real estate transaction.  It brings light to any known issues with the home's title.  During this process, a title professional will search public records and review land records many years back for any problems on the home's title.  Common problems are liens, evidence of unresolved prior interest, and disputes about ownership.  Many homes do have minor title issues.  However, they are resolved prior to closing and usually the title professional is able to clear the title without troubling the buyer.

A lien is a right given to another party by the owner of the property to secure a debt.  A lien can also be created by law in favor of a creditor.  Examples of liens are:  If the owner does not pay their local, state, or federal taxes, a lien will be placed on the home.  If the owner has contraction done on the home and fails to pay the contractor, a lien can be placed.  If the owner fails to pay association dues, the home owner's association can place a lien.

Prior interest is when another individual has ownership of the home.  For example if the home you are considering purchasing was originally sold on a land contract, but it was defaulted, the prior land contract owners would have a claim to the home.  A quit claim deed can be filed with the township giving ownership back over to the original seller.

Ownership is not simply someone who lives in the home.  The person residing in the home might not be the legal seller.  If the home is in an estate or trust, the executor, or someone with legal and written permission must be the one to sign for the purchase of the home.  The property might be in a will and in that case, all legal heirs need to be consulted prior to purchasing a home.

After a title search has been ran on the home and all issues have been taken care of by your title professional your home is ready to be purchased! The KW Selling Team recommends a few great title companies. You can refer to them here.