Why are title searches important?
From comparing different properties to figuring out what you can afford, buying a house is complicated. Just like when you buy a car, you receive an official title to file with your state or local government. That title demonstrates ownership and it may also show associated restrictions like easements or liens.
An easement may allow another person or entity to access your property for a specific reason, such as when a neighbor can only access their property by crossing yours. Properties are often subject to easements for utility lines, for public access to parks, or other areas open to the public.
Someone fraudulently selling a home is rare, but disputes over boundaries, fences, or trees near property lines are common. Completing a title search can help a homebuyer avoid a fraudulent sale, as well as these other disputes. A home is a considerable investment and removing as much risk as possible can help ensure your investment is sound. A title search may reveal:
- The legal owner of the home.
- The physical address.
- The latitude and longitude boundaries.
What information is required to perform a title search?
Most title searches only require a physical address or the current owner's name. In some states or counties, you may want to confirm the lot or parcel number.
Some properties for sale may span multiple parcels or lots. Properties may have been subdivided at one time before a single owner combined them. The property description or parcel map can inform you if this applies to your potential purchase. Multiple parcels may require a title search on each parcel.
Different governments have different policies for recording easements. Some easements may not be listed on the title or may lack sufficient details. An example is when a city maintains a universal utility easement extending onto every property where sewer or utility lines run both above and below ground.
Not all agreements are recorded or even written. If an easement is not recorded, you could be legally bound by existing uses, especially when these are apparent when you see the property. When you visit the property, take note of potential unwritten easements like a hidden path or access route to a neighboring parcel. You may want the current owner to sign an Affidavit of Title certifying a clear property title.
How can I conduct my own title search?
Titles and deeds are public records typically maintained by a government office, but it depends on where you live. It might require a trip to the city hall, a courthouse, property assessor, tax collector, or county recorder. There could be a single database for the entire state or records might be kept separately by city or county.
Many places have title information publicly available online for free. In some places, however, you have to physically visit a government building to search with a special computer terminal that contains the records. Some locations may provide a clerk to assist you with the search.
If you plan to buy in a new development, the property may not yet be subdivided. In that event, check for a larger lot that may be owned by your developer.
If you find nothing at all, there may be a missing file or recording error. A property not being listed does not mean that it has a clean title. If you cannot find the property title, you may want to seek professional assistance from a title company.
Can I avoid paying a title company when buying a property?
You may want to buy title insurance when buying a property. Mortgage lenders often require it. Title insurance protects you against possible claims on your home's title. For example, you may have thought the home had a clean title through your search, and then after you bought it, a previous owner sues you, claiming the seller fraudulently transferred the property. You could also have a neighbor claim to have an easement or a contractor claim to have a lien on the home for unpaid work.
Title insurance can pay for your legal defense and financial losses on covered claims. In order to obtain title insurance, insurers typically require a professional search firm to perform the title search. Your own title search, however, can still help you decide whether to make an offer or cancel your contract during the due diligence period, before you incur the costs of a title company.
If you have more questions about conducting a title search, or what you discover during your search, reach out to a Rocket Lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.