Title search: the most important exercise in real estate transaction
Title search is a very common term that you come across in real estate dealings. There are title companies that offer professional services for a title search that is a mandatory exercise to be undertaken when you are buying a property. Therefore, before completion of the transaction, it is the responsibility of the buyer to get a comprehensive title search done. The outcome of the search can affect your decision about buying the property.
What is a Title Search?
The rights that are attached to a property are outlined in its title and the process of determining the name of the owner and the kinds of rights that are associated with it is what title search is all about. The process is carried out by advocates or professional title companies who access public records to unearth the history of the property that establishes the true rights of the seller, whether he is in a position to sell the property and if the buyer is assured of all the rights that the seller is enjoying. When a title search specifies two owner it means that the span of search would begin with the current owner and end at the immediately preceding owner of the property.
What is Title Insurance?
In almost all real estate transactions, a title insurance policy is recommended for the buyer. This is an added layer of security that the seller enjoys. An insurance policy is issued by the insurers in favor of the seller after a clean report of title search is made available. The rights attached to the property, both existence and non-existence rights are insured by the title insurance policy. In the event of any deviation that can result in losses to the buyer the insurance company will pay for the losses.
The title search result is a long chain of title that reveals the ownership history of the property over a period of time. It records how the ownership has evolved and the property has changed hands detailing the buyers and sellers at different point of time. The records of ownership are available from public records kept at the property registration office or it can be accessed from privately owned title plants that belong to title companies.
The property that you purchase has to be free from all encumbrances that would ensure that you are not burdened with any liability or claim that the seller might have not fulfilled. This exercise in tax search determines the present status of real estate taxes of the property. Any unpaid taxes will be unearthed in the process and it will also bring to light any underlying assessments – past due or current. If taxes are due then the local governing bodies have the right to sell the property to recover its dues. As a buyer, you should desist from purchasing such property.
Going through a complete search process is the only way to ensure that you get what you pay for with respect to the property and the rights.