Why Is a Title Search Necessary When Buying a Home?

15 February 2017
 Categories: Real Estate, Blog


Part of the home buying process includes conducting a title search. A title company will check for any issues that could impact your ownership of the property. The expense of the search is passed onto you, but it is worth it. To help you understand the importance of the search, here are some situations that could potentially be uncovered by a title company.  

Undisclosed Liens

Your state's laws most likely require the seller to disclose any issues with the home, including if there are liens on the property, but this does not always happen. In some instances, the seller simply chooses not to. In other situations, the seller is not aware of the lien.  

Liens are routinely placed on property for a variety of reasons. For instance, a contractor might place a lien for completed work that was not paid for by the homeowner.  

Depending on the details, you could end up responsible for the debts if the purchase of the home is completed. Your lender could even choose to pull its funding of the purchase until the lien is cleared up. 

If you do choose to continue with the purchase, you need to verify that the lien is actually cleared. Ask the seller for proof that you can share with your lender and any other interested properties.  

Questionable Ownership

Logically, if the homeowner is selling the home, he or she must have the right to do so. Unfortunately, this is not always the case. There is a possibility that he or she does not legally own the property or have the right to sell.

There are many different scenarios that could lead to a homeowner not having the right to sell.  For instance, if the homeowner took possession of the home after a relative's death without the benefit of a will declaring him or her the heir, it is possible that state laws might declare another person the owner.  

Through the title search, whether or not the homeowner has rightful ownership of the home can be verified. The rightful owner might still sell the home to you, but you cannot proceed without the situation being remedied.  

Talk to a company like TitleSmart to learn about other situations that a title search can reveal. Your real estate agent or lawyer can also help you determine the way to handle any situations that could potentially impact the purchase of the home and help you decide if you need to move forward with searching for a new home.