What is a “title search” and why is it so important in the purchasing of property?
When a real estate transaction has been agreed upon by a buyer and seller, a title insurance company is brought in to conduct a title search. That means a title professional searches all public records available on the history of property for sale. Such a search will make use of records in county and municipal files and information storehouses
known in the industry as “title plants”, where the smallest details about the property are stored.
Records searched for will include documents, liens, utility assessments, usual and special taxes and levies, judgments and anything else that has been recorded about the property that may affect the new buyer’s ownership of the property in the future. Ideally the title search will reveal any problems that might arise so they may be dealt with immediately and the title cleared
Defects in the title
“Recorded” is the key word here. Though we live in an age where digital and electronic files allow for better record keeping, no system is infallible and it might be that some defects in the title remain unrecorded and therefore undiscovered until after the purchase has gone through. Such problems could be an unsatisfied
contractor’s lien, an unresolved boundary dispute, a code violation from a past remodeling, or a myriad of other flaws, simple or complex, that can arise to cause problems for the new owner in the future.
Title insurance is an insurance policy that, for a one-time fee, protects the buyer from legal problems and financial losses from old problems arising from the property’s historical chain of record. The protection extends from the time the property is purchased and the policy issued, through all the years the buyer may continue to own
the property. Even if flaws arise long after the purchase, the buyer’s rights are protected. Title insurance not only safeguards a buyer’s legal and financial rights, but provides them with a strong ally, the title company, should the property’s title ever need defense.
For more answers about title searches, visit www.alta.org.