Are you in the process of buying a house? Are you wondering why you need a title search?
A title search gets performed before you close on a new home. Basically, it’s a search for documents available on the property you’re purchasing. These could include liens or deed restrictions.
A title search is usually performed by an attorney or title company. You will receive a property title that certifies that you’re the new owner of the home. In addition, you’ll want to get title insurance, which can protect you if there are problems with the real estate title.
Is a title search always necessary, and why do you need one?
Let’s take look.
1. Completing the Sale
During the process of title search, your company will begin looking for liens against your property. These are financial claims against the property you’re buying that hold the property as collateral if the liens are not paid.
You’ll also find out about deed restrictions, which limit the ways in which your property can get used, or the construction that can be done on your property. These could include restrictions in terms of fences, colors, or pets. Title searches use documents such as deeds, county records, and recent court cases to obtain this information.
After you purchase a property, financing companies can actually place liens on your property for unpaid debts. This is why it’s critical to have a proper title search performed ahead of time.
A clean title is required in order for a real estate transaction to go through properly. It’s also why most buyers purchase title insurance. It protects you from any unknown financial obligations.
2. Lowering Your Risk
Even after a title search gets completed, your title insurance can protect you from any outstanding mortgages or judgments against the seller. There could also be legal actions or unpaid taxes that are held against the property.
In order to get protected against potentially dangerous situations, you’ll want to make sure a title search gets performed before closing.
3. A Great Value
A title search usually costs between $75 and $100. They might vary depending upon your property history or geographic region.
When you consider the tens of thousands of dollars in debts against your property that you could end up being responsible for if old liens are discovered, the cost of a title search and title insurance is well worth it.
When it comes to insurance, many companies charge a one-time fee of $1,000. Premiums do vary, however, and can range from a few hundred dollars to over $2,000.
The cost of title insurance will also cover any ongoing legal loss.
4. Preventing Fraud
Title insurance can also protect you against fraud when it comes to the purchase of your home. Con artists are often looking for ways to cheat homeowners out of their deeds and titles.
With title insurance, you’ll get protected against schemes against unsuspecting property owners.
5. Beyond a Lifetime Guarantee
Believe it or not, the protection that title insurance provides extends beyond your lifetime. Your policy will remain intact as long as you or your heirs retain ownership of your home.
If any of your heirs assume ownership directly from you, they will have the benefit of your title insurance coverage. It will protect your investment for many years.
6. Find Out About Bylaws
A title search can also serve to let you know if there are any bylaws registered against your property. This can let you know about any restrictions you might be facing before you complete your purchase.
You may, for example, might want to know if it’s possible to rent out part of the property. Or you may want to know about using part of it for an office, or your ability to renovate. A title search is a great way to know exactly what you’ll get permitted to do before you make a huge investment.
7. Peace of Mind
Purchasing a home is a major decision, and it can often be one that causes anxiety and over-thinking. If, however, you make your purchase with careful research and planning, you’ll have much more peace as you transition into a new phase of your life.
A thorough title search and title insurance give homeowners the assurance they’re looking for before they make a major purchase. It can help you to feel confident that any major ownership problems that arise in the future will get managed at no additional cost to you.
The Right Title Search Company
While your real estate agent may recommend a title insurance company to perform your search, you may want to do a little searching of your own beforehand.
Make sure you’re dealing with a local company, as these folks will have intimate knowledge of the laws and regulations in your area. You’ll also want to read online reviews and check out what former clients are saying.
Was the title search accurate? Were the company’s fees reasonable? Was the agent respectful and professional?
Ask for at least three references that you can speak to about their experience. This way, you can rest assured that your title search will be handled by experienced, knowledgeable professionals.
Time to Get Titled
A title search is about more than just going the extra mile before you purchase. It’s a thorough examination of the history of your property that can give you assurance about your future as a homeowner. And title insurance can make sure any problems that may arise in the future are taken care of.
Don’t stop becoming a savvy homeowner now. For more information on real estate, read our blog today.