A title search is when a person or real estate professional looks through county records and claims on a property to determine who the rightful owner of the property is. It is a part of the process when buying or selling a home to ensure the seller has the right to sell their property to the buyer.
The title search works by reviewing:
- Deeds
- County land records
- Federal and state tax liens
- Divorce cases
- Child support cases
- Bankruptcy records
- Financial judgments
The goal of a title search is to find the rightful owner of the property and find a clean deed. A deed is not the same as a title in that a deed is the actual physical document showing ownership, and the title is a statement that simply says who the owner of the property is. This is important because if the seller is not the official owner of the property, the buyer may end up not being able to buy the land which is a very costly mistake.
This step is important because if the seller doesn’t own the land, or the property isn’t zoned for your intended use, you will end up losing your home or having land that you legally cannot use for business purposes. But don’t panic, title searches are quick to do and not very expensive.
A title search on average will cost you between $100 and $350 and take anywhere from a few hours to a couple weeks.
Outside of a real estate transaction, title searches are sometimes done because someone is curious about who owns a property, or there is a nosy neighbor who wants information on the people in their community. Other times someone will do a title search to investigate alternate uses for their property. And you don’t have to be a licensed real estate professional to do one.
Title searches can uncover lots of interesting things. Some of them include:
- Debts owed – liens, mechanic, contractors, taxes, child support.
- Rightful heirs – estranged children, spouses not previously identified, long lost relatives.
- The property’s size and purpose – incorrectly recorded property laws, zoning laws that make the intended use not available.
- Other claims – someone may have gambled and lost or won the land in previous years and a county clerk forgot to record the rightful owner.
And if an issue with the title arises while you’re buying a home, don’t worry, you have options!
- You can require the seller to fix any issues.
- You can cover any debts and negotiate the cost of the property down for the same amount.
- Walk away from the deal and find another property to buy.
And now you know how a title search works and why you likely want to have one done before you buy a home or piece of property.