By Ryan McNeill, Attorney
The housing and real estate market has seen significant increases in sales since the start of the new year. Buyers are looking to take advantage of low-interest rates and sellers are enjoying historic high sales prices. This high volume of activity means Realtors, mortgage lenders, and real estate attorneys are all working hard to keep the buying/selling process moving.
One of the necessary tasks that must be completed prior to closing is a title search. This search protects the buyer and lender. Here are answers to some frequently asked questions when it comes to real estate title searches.
Q: What is the importance of a real estate title search?
A: Real estate transactions involve large dollar amounts. As a buyer, you want to do everything possible to protect yourself and your investment. in these types of transactions. Here are five reasons you should 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 a 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 is a homeowners’ association and whether there are dues or potential obligations or restrictions that may arise with the ownership of the property.
- May assist in determining whether there is a need to get a new survey, for the property to be accurately identified in the purchaser’s deed.
- 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.
Q: When am I required to get a title exam?
A: Financial institutions and banks normally 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. Even if you are buying the property for cash with no lender involved, we strongly recommend you pay for a title search.
Q: How far back does a title search go?
A: Most title searches will be for a minimum of 30-years, however there are cases where the search will go back much longer to identify where the last conveyance occurred. As a potential buyer you should also be aware of transfers in the chain of title by estates and foreclosure proceedings that require the title examiner to investigate the court files for compliance with local and state laws. 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 need help or have other questions about real estate, please contact Brinkley Walser Stoner, PLLC, or call (336) 249-210.