What is an Examination of Title when buying property?
Buying a house can feel overwhelming, but understanding each step makes the process much simpler. One critical part of purchasing property is the examination of title - a step that protects you from future headaches and potential legal issues. I'll walk you through everything you need to know about this essential property buying step.
Examination of Title: A detailed review of public records and documents to verify the legal ownership history and any claims, liens, or restrictions on a property. This process helps ensure the title is clear and marketable before a real estate transaction is completed.
The Title Examination Process
Several qualified professionals can perform a title examination. Title companies handle most examinations, though real estate attorneys and licensed title abstractors also provide this service. These experts dig through various documents and records to create a complete picture of the property's history.
During the examination, professionals review:
Property deed records showing ownership transfers
Tax payment history
Court records for legal issues
Public records for claims or restrictions
Property surveys defining boundaries
The process typically takes 2-3 weeks, though this can vary based on the property's age, location, and complexity of its history.
What Title Examiners Look For
Title examiners trace the chain of ownership from the current seller back through time. They're looking for proper documentation of each transfer and any potential issues that could affect your ownership rights.
Common red flags include:
Outstanding mortgages or liens
Tax debts
Boundary disagreements
Existing easements
Missing heir claims
Title Examination vs. Title Insurance
While title examination and title insurance might sound similar, they serve different purposes. The examination identifies potential problems, while insurance protects you if issues surface later. You need both - the examination spots current problems, and insurance guards against future claims.
Common Issues Discovered During Title Examination
I've noticed several issues that pop up regularly during title examinations:
Missing heirs claiming ownership rights
Forged documents in the chain of title
Mistakes in public records
Hidden liens from previous owners
Undisclosed easements affecting property use
Impact on Real Estate Transactions
Title examination results can affect your closing timeline. If problems surface, you might need extra time to resolve them. Some issues require negotiation with the seller, while others might need legal intervention. Clear communication between all parties helps smooth out these bumps.
Protecting Your Investment
Read your title examination report carefully. Ask questions about anything unclear. Work with qualified professionals who can explain the findings and suggest solutions for any problems found.
Digital Age Changes in Title Examination
Digital records make searching easier and faster than ever. Many counties now offer online access to property records, speeding up the examination process. New software tools help track and organize findings more efficiently.
Frequently Asked Questions
Q: How much does a title examination cost? A: Prices vary by location and property complexity, typically ranging from $300 to $800.
Q: Do I have to get a title examination? A: Most lenders require it, and it's strongly recommended even for cash purchases.
Q: What happens if problems are found? A: Many issues can be resolved through negotiation, legal action, or title insurance.
Next Steps
Ready to start your property buying journey? Bellhaven Real Estate's experienced team guides you through every step of the title examination process. We partner with trusted title professionals to protect your investment and ensure a smooth transaction.