What is a Title Search?

Along with having an inspection and home appraisal, conducting a property title search is an essential step in the home buying process. A title search confirms important information about a property to ensure that there is a clear title that is ready for transferral to its new owner. 

Typically conducted during closing, a property title search involves an examination of public records, including the chain of ownership on a property.

It is required by lenders, but should always be conducted as it safeguards homebuyers against certain issues, like outstanding claims or liens. Typically, a property title review takes between 10-14 days to complete and costs between $75 – $200.

What Does a Title Search Look to Uncover?

Some of the potential findings during a title search include:

• Ownership Verification: Confirmation that the seller is the current owner
• Chain of Title: History of transfers of the property, including sale prices. These can help you identify the assessed value vs. the market value of the home.
• Liens: Legal claims against the property’s value
• Taxes and Encumbrances: Other claims, such as unpaid property taxes, homeowners association (HOA) fees, and unpaid bills for previous home repairs
• Easements: Restrictions or rights others may have to use the property. For example, if your yard provides access to a public beach or walkway
• Legal Descriptions: Verified the property’s boundaries and any subdivided plots associated with it
• Encroachments: Trees or property, like a fence that crosses over a neighbor’s property line. These may go unchecked until a house goes up for sale, at which point there may need to be a resolution.
• Restrictions and Covenants: Limitations set by a homeowners association (HOA) on the property, e.g. approved house paint colors, landscaping rules, uniform mailboxes, parking zones, quiet hours, etc.
• Illegal deeds
• Unfamiliar or uninformed heirs
• Impersonators acting as the seller

Documents in a Title Search

A title search may utilize the following documents to compile historical information about a home: APN number, deeds, tax liens, land records, court judgments, wills, past property surveys, easements, covenants, conditions, and restrictions (CC&Rs), agreements, resolutions, and ordinances.

Who Conducts a Property Title Review?

Conducting a property title search can be difficult as the documents are often filled with legal jargon. The homebuyer typically employs a title company, real estate agent, or attorney to conduct the search for them. These professionals will pull together all the documents to create a complete file known as the ‘abstract of title.’

If you do decide to conduct your own home title search, you can find the records at public places like the county courthouse, tax assessor’s office, or recorder’s office. It is advised to work with an experienced professional for title searches, and your lender will likely require a professional service.

What Happens if There is a Title Issue?

If an issue is uncovered during the title search, it must be fully resolved before the property can be transferred to a new owner. A real estate attorney or title company handles this by taking measures such as addressing back taxes, locating heirs, or presenting a death certificate. This resolution process can take anywhere from a few days to several months.

Title Insurance

Title insurance safeguards both the homebuyer and the lender against financial loss due to title-related issues that may occur during or after a sale. Even experts can make errors during the complex and lengthy title search process, which is why the insurance is needed. Generally, the cost of title insurance ranges from 0.5% to 1% of the property’s purchase price.

A title insurance policy typically covers the following:

• Incorrect signatures on documents, forgery, and fraud 
• Restrictive covenants, such as unreported easements
• Unknown encumbrances or judgments against a property
• Ownership conflicts, including contradicting wills or deeds
• Boundary or survey issues that were not recognized at the time of purchase
• Legal expenses associated with defending the title against covered claims

Full Title Protection for a Smooth Home Transition

Falling in love with a property is only the first step. Before you can feel safe investing in a home and confident in your choice, a home title search must be done. Once you have confirmed that the title is clean, be sure you ask these important questions when buying a house.