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How To Perform A Title Search On A Property?

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Even homes that have been in the same family for years could create title issues when the seller brings them to market. If you are considering a home purchase, it is important that you thoroughly vet the title of the home to ensure that no issues will arise later. A title search on a property can reveal any information that you need to know before you commit to the purchase. When considering a property for purchase, conducting a title search on the property is always a good idea, and here’s what you can expect from the process.

What Is A Title Search?

A title search is an in-depth evaluation of the history of a property, such as who has owned it in the past and whether there are existing debts associated with the home. You can do a little bit of title searching on your own, but the most comprehensive evaluations are usually conducted by a real estate attorney or a title company. Specifically, this is completed by someone called a title abstractor, whose job is to verify all ownership of the house and view all of the information available to ensure that everything aligns properly.

professional reviewing documents with a couple in a brick officeDuring this process, the abstractor may discover any variety of potential issues that could cause a “title defect” or “cloud on title” which are problems that could impact your ownership. These issues could include, among many other things:

Liens – When the owners of a home create a debt or fail to pay their property taxes, a lien may be placed on the home; those debts are then tied to the home. If the owners sell the home without paying off the lien, the new owner will be responsible for the balance, even if they had no part in creating the debt in the first place.

Break in the title chain – A robust and accurate title history should show who has owned the house from the time that it was built until the present without any breaks. If this information is not demonstrated, it could indicate that the home was not sold properly or that someone else may truly own the home. If you buy the home from a seller who did not have a right to sell it, you do not have a right to own it either—even if you have paid for it.

Judgments and hindrances – Sometimes, a home may be gifted or bequeathed to someone in a will or settlement. However, for whatever reason, that person may not be able to be located at the time. A title search can help to identify if such a party was ever contacted and whether they could come back to contest their ownership of the property in the future.

Performing A Title Search On A Property

The title search process is fairly straightforward. First and foremost, be sure to enlist a title professional for this purpose. Not only will they have an easier time accessing data, but they will also have the required skills to interpret it. They can identify issues that an untrained eye may miss.

attorney speaking with a client on the phone while looking through her laptopNext, the expert will view the public records relating to the house. If all of the information is satisfactory in this step, they will proceed to tax records to ensure that all taxes have been paid on time and that no liens are present.

After these assurances are met, the professional will examine the deeds for the property over the last 50+ years. They are checking to ensure that there has been no break in the chain of title over this time. They will then prepare an abstract of the title that thoroughly summarizes everything from easements to inheritances related to the property. You should have this document present with you to negotiate for the property.

It is possible that during this investigation, your real estate attorney or title expert may identify a problem. If an issue is found, it can often be corrected before closing. Human errors such as data entry mistakes on a deed can be corrected with the proper supporting documentation. More nuanced challenges can be navigated with the assistance of a real estate attorney. At this stage, you may also decline to purchase the home if there are unexpected liens for which you are not willing to assume responsibility.

Trust The Experts To Safeguard You Against Title Issues

Whether you are just starting your home buying journey, or you are nearing the closing date on a particular property, do not neglect a thorough title search. This will help to keep you safe from unexpected issues, and the experts at Mathis Title Company would be happy to help you with this process. Contact our team of experienced professionals to learn more about title searches and title insurance for lasting protection, or to schedule an appointment.

How To Apply For Title Insurance

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title insurance on laptopIf you are buying a new piece of property, it is wise to plan on buying a title insurance policy as well. This is done to ensure you are protected from any financial fallout that could occur if there is something wrong with your legal claim to your new purchase.

Though a title search is a standard part of closing on a property, there is always a chance something could be overlooked or discovered later, after you own the property. If there are unfortunate issues attached to the title of the property, the effects could be devastating. In the worst-case scenario, you could lose the property and all the money you have already put into it (your equity).

Acquiring title insurance is a streamlined and often simple process that generally goes smoothly when working with a reputable insurance agency. Here are the steps to apply for title insurance that will help you know what to expect:

Asking For The Insurance

The first step in obtaining a title insurance policy for your protection is to request it. This policy is not an automatic part of closing on a property. You, as the buyer, may choose a company and inquire for yourself, but the most common way is to discuss this with your closing agent or attorney and have them recommend an insurer that they work with often. You are not obligated to use the title company that is recommended to you; therefore, take the time to research which agency will best suit your needs.

Title Search

Next, the title agency you have chosen will conduct a series of thorough searches to find all of the documents necessary to fully understand the state of the title. This will include all public records that are related to your property and will include past deeds, wills, trusts, divorces, and financial records.

title search conceptThe title agent then examines all of these records, interpreting the information to determine whether every transaction associated with the title has been properly managed, noticed, and filed. If anything appears to have been improperly recorded or otherwise mismanaged, they will work to determine the error(s). In the immediate, the concern is mainly focused on reporting about the state of the title. If any issues have been discovered, those will be corrected going forward.

Finally, the agent compiles a report including everything they have discovered regarding the title. They will make an expert analysis of the state of the title and share this with you, the potential buyer, to inform you of any problems.

Title Commitment

Assuming there are no issues, you are given a title commitment (or binder) from the title insurer. This is a contract that outlines the terms of the insurance. You and the insurance company must agree on who and what will be insured, how much will be covered and how much it will cost you. Ask questions to be sure that you fully understand any exceptions to the terms of the agreement and any other requirements necessary for the policy.

Clearing The Problems

The next step consists of more duties for the title agent, though you will likely be involved too. In addition to working for you, the title agent also works with the sellers, lenders and any attorneys to correct any discrepancies in the chain of title.

There may be outstanding issues within the list of people who have owned the property that would make a buyer hesitant to purchase the property and the title. There may also be outstanding tax debts or liens against the property that must be paid before purchasing the property. Before purchase, it will have to be determined who is going to take responsibility for any of those debts.

Payment And Closing

home buying agreement sign conceptBefore your coverage goes into effect, you must pay the premium for your insurance policy. This is usually a percentage of the total purchase price of your home, and unlike other types of insurance where you pay monthly or annually for continued coverage, title insurance is typically a one-time fee.

This payment will occur as part of closing, in addition to all other payments and credits. The closing transaction may be completed anywhere, but it often takes place at the office of the attorney or title company.

The Policy Is Sent Out

Once completed, your title policy is issued. You and your property are now protected from any other problems that may exist that are undiscoverable. This may include an heir to the property who was previously unable to be located and now comes forward to claim what is rightfully theirs.

Trust The Professionals To Help You Select the Right Coverage

To ensure that you have a policy that meets your needs, be sure to rely on the experts. The professionals at Mathis Title Company would be happy to help you select the right coverage for your new home purchase. Contact Mathis Title Company to learn more or to schedule an appointment to get started.

How Long Does It Take To Do A Title Search?

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Unless you are the first-time buyer of a newly built home, any residence that is on the market should have a recorded history of events for the buyer to review. These events may include tax penalties, changes in ownership and possibly mechanic liens. If you enter a home purchase without first reviewing the history of the title, you may end up liable for additional financial obligations. In severe cases, you may not even be allowed to keep the home. This is why having a professional conduct a title search is essential to your house investment.

What Is A Title Search?

A title search is an investigation into the previous events that have occurred about the home’s title. This delves into who were the previous homeowners, confirming that all dues, taxes and money owed against the home have been paid. A common issue that title searches are looking for is whether the current owner has the right to sell the property to you from the start.

Earlier mistakes on the deed caused by fraud, forgery or errors can result in problems. The person who is currently in charge of the home may not be considered the legal owner which means they may not have the authority to sell the home to you. This is one of the more critical reasons why conducting a title search before closing can protect you.

Do You Need A Title Search?

couple reading documents together in the living roomA title search is a simple way to ensure that the history of your pending new home is in the clear. Without one, you could find yourself responsible for anything that remains attached to that property including liens, where a debt is still owed when the home is sold. If you buy a residence that still has liens, you will be responsible for paying those debts in full, even if you had no hand in creating them.

A title search will also reveal (and prepare you to resolve) issues such as boundary disputes or easement problems. This search also ensures that the person selling the property is the legal owner. If they are not, and you have purchased the house, it may be taken away from you.

Won’t A Title Search Happen Automatically?

Some people choose to skip a title search because they think that it happens automatically during closing which is not necessarily true. While some reviews of a property’s title may naturally occur with the purchase—for example, as part of buying the lender’s title insurance policy—these reviews may not always be as thorough as an actual title search. Additionally, it is in your interest to perform a search before closing, so that in the event of title issues, you have not already committed your money to the property.

How Long Does It Take To Do A Title Search?

A title search is a relatively quick process, especially if the title is clear. In general, a thorough title search should take no more than two weeks, with many requests being fulfilled much sooner. The process can take longer if issues are discovered with the title, or if any measures need to be implemented to clear the title. For example, if the title is unclear due to missing paperwork from the past or other issues, expect to allow your title search experts some extra time to resolve the problem.

man and woman reading from a laptop in a sunny roomIn many cases, you may also choose to wait extra time if you would like a more thorough search that includes options such as property inspections. This can help you to shore up your knowledge about property lines to prevent or easily resolve disputes later.

Correcting a title can take extra time, but once completed, you have the assurance that you have a clear title that legally grants ownership to you once the purchase transaction is complete. This is why having a title search and purchasing title insurance to protect yourself against issues that are discovered are worth your attention.

Trust The Experts To Help You Confirm Your Home’s Title Before You Buy

If you are ready to move forward with a property and make sure that the title is clear before you buy, be sure to trust the experts who have experience in conducting thorough and complete title searches. The professionals at Mathis Title Company will gladly help you with any of the problems that may arise with a home’s title, and can insure you against potential financial loss due to issues found along the way. Contact our expert team to schedule an appointment.

3 Reasons Title Insurance and Foreclosures Go Hand In Hand

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If you’re in the process of shopping for a home, one of the options you may have considered is to buy a foreclosure. These properties are often less expensive than their standard on-market counterparts, which can be appealing to buyers on a budget. However, foreclosed homes are also much more likely to have some issues that need to be addressed, and there is a reason why these types of properties go hand in hand with title insurance policies. When purchasing a foreclosure property, it is more important than ever to obtain title insurance and this article will explain why.

What Is A Foreclosure?

Foreclosure is a process by which a mortgage lender attempts to recoup the costs they incurred by lending for a certain property. The most common scenario is this: A bank provides a mortgage for your home. Then, for any number of reasons, you become unable to pay your mortgage payments anymore. The mortgage that you signed is secured by your home as collateral, and the bank does not want to lose all of the money that it allowed you to borrow.
To recover some or all of its investment, the bank will reclaim the house from you and sell it. The money from the sale will be used to cover as much as possible of the mortgage that you did not pay. If your home is foreclosed, you will not be allowed to live there, and other purchasers will be allowed to buy it from the lender.

Why Are Title Insurance And Foreclosures Related?

couple reviewing documents together at the coffee tableForeclosures are rarely what the homeowner anticipated, so some disputes and less than amicable processes are often involved. This is part of the reason that title insurance claims are often so closely related to foreclosures. For example:

1. Money Challenges

If ownership is called into question, and you do not have secure title insurance, you may find yourself spending a significant amount of money to defend your property. If you find yourself in court to fight a claim from a previously unknown heir who is trying to claim the home, you may impede your ability to pay your mortgage and end up in foreclosure yourself. Title insurance shields you from these financial liabilities helping you remain financially solvent.

2. Difficulties With Previous Owners

Most homeowners never intend for their homes to be foreclosed upon, and they may make the buying process more difficult for a new purchaser. Title insurance is often used to help keep the purchase more secure and protected, and that includes protection from previous owners. For example, you may buy a foreclosed property only to find that the previous owners are still living there. If you need to evict, title insurance that is more focused on foreclosures may help.

3.Foreclosed Properties Are Riskier

Why did a home foreclose in the first place? If you do not protect yourself with a robust title insurance policy, you could be responsible for the same problems the previous owners were unable to avoid. If they did not pay their property taxes for the home, you would still be responsible for those back taxes. If they failed to pay a contractor for work on the home, the contractor may have filed a mechanic’s lien; even if you had nothing to do with the origination of that debt, you would be financially responsible for paying it in full. Title insurance shields you from financial liability in these scenarios which tend to be associated with foreclosed properties more often.

Do You Need Title Insurance At All?

insurance agent inspecting a home with magnifying glassForeclosed properties pose a much higher risk than average when it comes to financial pitfalls, and title insurance is a critical element of purchasing this type of property. However, even if you are considering a home in good standing, title insurance still protects you from shouldering the burdens of previous owners and heirs. It also keeps you in possession of the home in case previous deed documents were forged or fraudulently created.

Securing title insurance for a foreclosure can be much more difficult than for a standard home. The simplest process is buying a real estate owned (REO) foreclosure, which has already been vetted. Buying the home at the courthouse is even riskier, and you should speak to a professional to learn more about how to secure the right title insurance coverage for your type of property purchase.

Trust The Experts To Help You Secure The Right Coverage For Your Property

If you are considering foreclosure, be sure that your title insurance is very comprehensive. The experts at Mathis Title Company can help you to secure the right type of policy, even for foreclosed homes. Contact our experienced team of professionals to learn more or to schedule an appointment to get started.

Is Title Insurance A One Time Fee?

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Title insurance is one of many decisions you will need to make on the journey to home ownership. While your attention is focused on other important documents that you need to collect and sign, be sure you also understand how title insurance can help you. Choosing a reputable insurer and securing robust coverage can protect your home investment for a cost that most buyers consider very reasonable. Here’s what you need to know about how title insurance works and how much you can expect to pay for it.

Is Title Insurance Paid As A One-Time Fee?

Most types of insurance coverage, from healthcare to homeowner’s policies, send a bill to you each month that you must continue to pay to keep your coverage. However, a title insurance fee works differently; with title insurance, you only pay for the policy once, as a lump sum fee. Most often, this is paid at the same time as other closing costs.

man using his hands to protect a wooden homePerform due diligence and make sure that you are buying a title insurance policy for yourself. You may see a line item among your closing costs that accounts for title insurance, but this is likely referring to the lender’s policy. The lender will require that you purchase title insurance for them; however, this coverage will not safeguard you. You must have a separate policy for yourself to protect your interests.

What’s In A Title Insurance Fee?

Title insurance is an affordable way to protect your home. Because it is paid as a one-time fee, you can accurately plan exactly how much it will cost, and that price is based on the overall value of your home. Most often, the price of title insurance will be calculated between 0.5% and 1% of the home’s value making it scale alongside your funding ability. Those purchasers who buy a more expensive home will see a slightly higher price for title insurance than those buying a less expensive home.

Do I Need Title Insurance?

When you receive a copy of your estimated closing costs, you will already have quite a few line items factored in and may then begin to wonder if title insurance for yourself is worth the expense. The reality is that issues can arise after you have taken possession of your home and can threaten your financial well-being as well as your right to claim the home as your own. In the worst case scenario, you may lose the home entirely.

While a title insurance policy will vary in coverage depending upon the insurer and the type of policy that you choose, you can generally expect protection that includes:

  • Boundary issues
  • Some zoning challenges
  • Fraud
  • Errors in the history of the property
  • Undisclosed liens
  • Formerly unknown claims against the property

If you purchase a home and later find out that there were one or more liens placed against the property that you didn’t know about, you would be required to pay that debt, even if you had nothing to do with the origin of the debt(s). However, a title insurance policy would protect you from that type of financial obligation.

Will My Policy Ever Expire?

insurance agent shaking hands with new clientA title insurance policy is paid as a one-time fee, and then it covers you for the entire duration during which you own the property, no matter how long you stay. However, you cannot bring a title insurance policy with you, since it is specific to each home; that means that if you had title insurance on the home that you are moving from, you will need a new policy for your new property.

While title insurance typically cannot be transferred, it also applies to your beneficiaries. That means that if something happens to you and the home passes to a beneficiary listed in your will, they will also be covered by the title insurance policy. The only time a title insurance policy expires is when you or your eligible beneficiaries no longer reside in that property, making title insurance a “one and done” type of protection.

Trust The Experts To Help You Protect Your Investment

You may still have questions about what title insurance can do for you, and the good news is that you don’t have to do this research on your own. The experts at Mathis Title Company would be happy to answer any questions you have about insuring your property. Contact our team of professionals to learn more, or to schedule an appointment to get started with a policy of your own.