What is Involved in a Property Title Search?

Title Company & Services in Murfreesboro, Smyrna, La Vergne, TN

For buyers and sellers alike, a property title search is vital to the real estate transaction. However, the state of Tennessee doesn’t mandate all sales participate in a title search. It’s not required by law. Purchase a home in Middle Tennessee and you could side-step this part of the close. But is it the best decision?

What is a Title Search on a Property?

At the basic level, the title search will confirm the property is, in fact, available for sale. Sellers what to ensure they have a marketable property without defects that could result in a lawsuit. Buyers want a title free and clear of liens, loans, and other judgments that might challenge ownership or become a financial burden.

In-depth analysis of public records can reveal a lot of information about the property, and it’s previous/current ownership. The quality of the search determines the vitality of the deal. That’s why anyone involved in a real estate transaction relies on a reputable title company to conduct research. The search is administered by a reputable title company that confirms any, and all information about the property is accurate and up-to-date.

10 Issues a Title Search Could Reveal

In an ideal situation, the title search wouldn’t reveal anything. Errors can appear when you start going back far enough. There are ten most common issues that can be identified in a thorough title search.

  1. Unknown Liens – any debt from a previous owner transfers with the property. Distinguishing this information could save you a lot of money.
  2. Illegal Deeds – Someone who falsified information on a deed (mortgage) could challenge your right to ownership. For example, if a previous owner had said they were single when, in fact, they were married could mean the spouse has a claim.
  3. A Will – A property can be left to other parties if the owner recognizes them in their will. A title search will confirm that no such document exists that could challenge your rights.
  4. Heirs – In the event a property owner dies, and no will is left, the land and home are bequeathed to their heirs. It’s not uncommon for some to go missing, or be a challenge to find. But if they materialize, they could have legal rights to ownership.
  5. Human Error – Errors happen all the time. It’s what makes us human. Clerical and filing mistakes could financially impact the sale.
  6. Forgeries – Untruthful information can be filed in the paperwork with the county clerk fabricating the rightful owner. If a counterfeit is named, your ownership could be at risk.
  7. Encumbrances – A third-party could have a claim on some or all of the estate. Encumbrances could involve restrictions or covenants that stifle ownership.
  8. Disputes – Most disputes revolve around property boundaries. A title search reveals past surveys to confirm the portion of the property in question is accurate during the sale.
  9. Easements – Governments agencies or other third-parties could have access to the land. Finding out what easements are attached confirms you can use the area as you like.
  10. Impersonation of the owner – Similar names make it easy to impersonate others. Imitation could put you at risk.

Processing the Title Search

TItle examination goes back around 30-years. That’s 30 years of public records to sift through. It would take on average up to a week to complete. It’s useful information to have as most mortgage lenders won’t let you complete the sale without the results of the title search.

Something some buyers aren’t aware of is a process called the “curing” period. Finding problems on a title isn’t uncommon. However, a proper title officer will remedy what issues they can. An example could be procuring information about payment when a lien is exposed on a public record. Often, the officer can complete this information to clear the title on behalf of the owner.

Choosing a Title Company

The right title company will assist you throughout the process to ensure the estate in question has an insurable title. After the reports are processed and reviewed together, you have the option to purchase title insurance.

Title insurance is a peace of mind. It provides financial backing to rectify problems that don’t require you to dip into your pockets. Choose the right one will have a comprehensive list of real estate services that include a search, insurance, and closing assistance.

Hydepark Title & Escrow honorably serves buyers and sellers in Murfreesboro, Smyrna, La Vergne, and the surrounding areas with dependable real estate services. Clients have trusted us to handle their transaction based on our integrity and strength of our services. You can learn more about how we serve Middle Tennessee with title services that support a healthy close.

What are Title Companies and What Do They Do?

Title company Murfreesboro, Smyrna, La Vergne

Owning property is a valuable asset. Valuable assets are often protected by legal documents to ensure both buyer and seller are getting the most out of the transaction. As you navigate through the process of buying and selling real estate, working with a title company will eventually come into play. While they are synonymous with real estate transactions, many individuals aren’t aware of their role and how important they are to the closing process. Title companies work closely with the property title and perform research critical to protecting the investment.

The Importance of a Clear Title 

All the work a title company completes involves the property’s title. Understanding the essential role the title has in property ownership clarifies why title companies are not just part of the closing process, but they are critical to success. 

A title is a document that gives the owner the right to possess, control, and engage with their property. As the property is bought, sold, or passed on through wills, the single title will receive a new owner but only represent the individual property. The county clerk keeps records of the information noting date, ownership transfers, and other details. Some of the details can challenge the right to ownership and possibly create a financial burden for the current proprietor. 

Potential Defects on a Property Title 

Anything on a title that could negatively impact ownership is commonly referred to as a “defect.” Defects can appear as an unpaid judgment, fraud, or lien. A lien is quite common, so let’s use that as an example. A lien is when a mortgage lender decides a borrower hasn’t met the requirements of their loan agreement and puts a claim on the property. The owner of that property is financially responsible for that outstanding balance. It gets tricky when the outstanding balance accrued before you came into possession of the real estate. The balance is attached not to the borrower but the property itself. So, if it is bought and sold with a lien attached, the lien will become the new owner’s responsibility. Having a lien removed would require you to pay off the debt in full or settle. 

What a Title Company Can Do 

Title Research 

It’s possible to bypass defects by running a thorough search on the title’s history. Conducting this research is just one of the many things title companies do for buyers. They will review all documents and information attached to the property and present a report. The report will outline any information that they find. If there is a lien or outstanding taxes, you will know before you complete the purchase. In most instances, the title company can help you decide if these issues are rectifiable and how to go about getting them removed. 

Get Title Insurance 

Buying commercial or residential real estate is costly. A considerable investment that often sees between 9.5% and 10.6% ROI. With that in mind, you want to do what you can to keep it protected. Title insurance, while not a requirement in the state of Tennessee, offers a lot of support. Its primary responsibility is to provide financial assistance if a defect creeps up after you purchase the property. The insurance kicks in to cover the legal costs and reimburse you if you were to lose the home. Your title insurance company would recommend or possibly provide coverage for title insurance. All of which will be addressed and signed-off during the close.

Help With Escrow 

As two parties are processing a transaction, primarily when large sums are involved, a third-party will fulfill the obligations of completing the sale. It assures the payment of one party to another and disburses the funds once all the paperwork is completed. Placing the money in escrow allows the buyer time to perform due diligence on the property, and the seller reassurance that the buyer has the means to complete the purchase. As a buyer, you can choose your escrow company. Often, title companies have the ability to act as an escrow to streamline the process and make closing simple.  

Be Your Closing Company 

A closing company steps in to help with all the finalization. Buying and selling real estate is engulfed in legal documents. They are hard to navigate on your own. A closing company will help. If you choose wisely, you can get a title company that will work with you throughout the process and also act as your closing company. They can make informed recommendations and explain in detail the paperwork you are signing and what is expected of you every step of the way. It’s the responsibility of a title company to know and follow the rules, regulations, and industry compliances. Choosing a title company as a closing company ensures outstanding attention to detail. 

Whether you are buying a property in Nashville, Murfreesboro, or Smyrna, you have the right to choose your title company. At Hyde Park Title & Escrow, we offer a comprehensive range of title and closing services. From research to maintaining escrow accounts, we are with you every step of the way.