What is a Title Search?
Buying a home in Albuquerque is an exciting yet potentially overwhelming experience. The process involves numerous steps that lead to the closing.
One of those steps is called a title search.
It is important to note that when purchasing a home, it is not always guaranteed that the seller has full entitlement to sell the property. There may be instances where another individual or entity has a claim or lien on the property in question. Therefore, it is crucial to conduct thorough due diligence and seek professional assistance to ensure a clear title before proceeding with the purchase.
That’s where a property title search is relevant.
What Happens During a Title Search?
When purchasing a home, conducting a title search is crucial. This process involves reviewing public property records to verify the legal ownership of the property. Additionally, a title search uncovers any existing liens or claims that may impact your ability to purchase the property.
A property title is distinct from a deed and is not a document. It represents ownership rights. A title company or attorney can conduct a property title search to ensure no other party can claim ownership. If you are obtaining financing, a title search is mandatory before the loan is funded.
Who Does a Title Search?
When purchasing a home, the responsibility of conducting a title search falls either on a title loan company or an attorney, depending on the location. After the contract is signed, the buyer's attorney may order the title search and either complete it themselves or delegate the task to a title company. The completed report is then sent to the seller's representative, who is responsible for handling any issues that may arise.
There are a lot of sources of information that might be accessed during a title search, including:
- County land records
- Deeds
- Property plats
- Tax liens at the state and federal level
- Divorce records
- Bankruptcy court records
- Construction liens
- Judgments
When a title search is done, it will also uncover details about mortgages associated with the property.
How Long Does it Take?
The duration of a title search can vary from a few hours to a few weeks. Generally, the older the home you are interested in purchasing, the longer the title search will take. This is due to the potential involvement of multiple owners and transactions related to the property.
What If There Are Issues?
Some of the common issues that can come up during a title search include:
- A break of chain in the title: In this scenario, there might be a missing deed in the chain. This is common in older homes.
- An improper description on the deed: There might be an improper or missing description on a deed, and that would require obtaining a corrected deed.
- Missing interests: If there’s a transfer via an estate in a title chain, then any heirs must have relinquished their interest in the property. If they haven’t, then you have to get deeds from the parties with an interest to release it.
- Liens: This is a legal claim or right on a property often used as a way to get repayment for a debt. Title searches can show if there’s a lien on a property and whether or not it might be expired or could be something requiring payment.
A title search is a crucial step in the home buying process. It is important to understand what happens during a title search and the potential results. To gain clarity, it is recommended to consult with your Realtor or attorney. Failing to uncover issues like judgments or liens before closing on a home can lead to costly and stressful situations down the line. If you purchase a home with a judgment against it, you may become responsible for resolving the issue.
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