Our real estate attorneys often get questions about the need for a title search (and the related expense). We have compiled a list of frequently asked questions about title searches / title examinations.
Q: Why should I get a title search by an attorney when purchasing residential or commercial real estate?
A: For most people, real estate transactions involve large dollar amounts. As a buyer, you want to do everything possible to protect yourself in these types of transactions. There are a number of reasons to have a title examination:
- Need to identify whether there are existing deeds of trust, judgment liens, tax liens, past due county taxes or other liens of record that interfere with a purchaser getting clear title for the property;
- Need to identify whether the seller is competent to transfer title or contract for the sale of the property;
- Need to identify whether there are any restrictive covenants that outline or restrict the use of the land;
- Need to identify whether there is a homeowners’ association, and whether there are dues or potential obligations that may arise with the ownership of the property;
- May identify a recorded survey or plat, which may assist a purchaser in visualizing the boundaries of the property or any established easements and right of ways for the property;
- May identify any easements and right of ways that the property is subject to, or easements and right of ways that benefit the use of the property;
- Determines who the parties are that need to join in the execution of a deed to convey all interest, right and title to the property to the purchaser;
- Identify whether the property has access to a state maintained road;
- May assist in determining whether there is need to get a new land survey, in order for the property to be accurately identified in purchaser’s deed;
- May assist attorney in advising you whether purchaser should invest in a title insurance policy for the purchase of the property;
- May identify instruments in the chain of title that need to be corrected on record in order for seller to transfer clear title to a purchaser.
Q: When am I required to get a title exam?
A: Banks and financial institutions typically require the buyer (borrower) to pay for a title examination and title insurance. This is true for a new purchase or if the bank is refinancing an existing loan on a property. This protects their interests in the property used to secure the loan.
Q: How long does it take for a title search?
A: Every title search is unique; most require a minimum 30 year search or more. Sometimes there may be very common names that are searched on record, which requires more time for distinguishing parties by the title examiner. Also, transfers in the chain of title by estates and foreclosure proceeding require the title examiner to investigate the court files for compliance with local and state laws. Essentially, it depends on what is discovered in the examination, but most importantly it is necessary that the title examiners exercise care and be thorough in the examination to provide accurate information for the purchaser.
Q: Can I get title insurance without a title exam?
A: No. An attorney must check the title to a property and certify that title to the title insurance company in order for the title company to issue a policy.
If you have other questions about real estate title searches, you may wish to schedule an appointment with a real estate attorney.