A property title refers to the legal right to own a property. When a homebuyer puts in an offer on a home, a title search is conducted to confirm that the seller is the rightful owner and ensure that there are no hidden claims or liens on the property. At times, homeowners themselves may be unaware of old liens against their properties, making a title search a key step in the homebuying and selling process.

A property title search is typically ordered by the lender during escrow and involves a comprehensive evaluation of public records and documents to identify any liens or legal claims on a particular property. While lenders will normally manage this process, anyone – from homebuyers who might not need a mortgage to homeowners looking to refinance their homes – can request a title search. Title insurance companies will also run a preliminary title report before issuing a title policy.

Why are property title searches important for buyers and sellers?

If the seller is not aware that a lien or other encumbrance is attached to the property, it can take days or weeks to clear it up. For instance, if a seller inherits a property from a trust and the whereabouts of the other beneficiaries is unknown, the seller will need to locate and secure the co-owners’ signatures or seek a legal remedy, which can be a drawn-out process.

For buyers, the importance is crystal clear. If liens and pending lawsuits aren’t discovered prior to closing, they may need to pony up big money to resolve or challenge such claims. A title search will thereby protect both the homebuyer and lender from nasty surprises.

Can I do the title search myself?

While it is always a good idea to defer to professionals, such as a real estate attorney or title company, to handle a title search, you can tackle this part of the process on your own. Keep in mind that doing your own title search will open you up to some risk. Small details may be overlooked by the untrained eye. A person may appear on a tax bill or even the most recent deed as the owner, but if the property wasn’t transferred correctly somewhere in the historical chain of title from a seller to a buyer, they will not own it.

If you still want to undertake the process on your own, make sure to check the tax assessor’s records as well as all deeds on the property online or at the deed recorder’s office in order to establish a chain of title. If the county Recorder's Office or Office of the Examiner of Title has an accurate tract index, you may use your property’s legal description, which is often found on a property’s tax statement, to look up the chain of title.

How much does a title search cost?

The cost of a title search varies by state and is based on the loan amount and purchase price. A basic tract search can cost as little as $175, while a complete ownership and encumbrance report typically comes out to just under $1,000.

Buyers, however, are generally required to purchase a lender’s title insurance policy, which includes a property title search and is paid as part of the closing fees.

I would be happy to refer you to someone who can give you fantastic advice on title searches. Call me today to set up an appointment!