A title search is a procedure performed when a parcel of property is being transferred to new ownership, through either a sale or inheritance. The purpose of this report is to investigate the history of the property through relevant records for any variances or irregularities associated with the property.
The resulting report filed from a title search is called an Abstract or an Abstract of Title. It precludes a Deed and is one of the processes that real estate law requires when transferring ownership. The mortgage company also requires it before any loan can be approved.
A Real Estate Attorney, a Title Abstractor or many Real Estate Brokers are qualified to do a title search. It involves researching the deed records of the specific property. Most searches are now available online, depending on the county and state.
During the escrow period of buying a property, a Title Company will be assigned to investigate the history of the property. If you are planning to get a mortgage to purchase the property, the lender will use a title search as a mortgage approval process. They will want to know all pertinent information, especially proof that the property is owned free and clear and that any existing liens or mortgages are being paid off at the time of closing. A mortgage lender will require title insurance on said property as a conformation of the search records.
A title search will reveal if the land is fee simple or leasehold. It will expose any outstanding easements, judgments, liens, mortgages, taxes or any outstanding claims. Soil, survey and water conservation as well as covenants from associations may also be included in this report.
Even if a mortgage lender is not involved, one of the most significant results of a title search is to discover if there are any outstanding mortgages or liens on the property. Otherwise, you could purchase a property at a seemingly good price, only to discover the property has a first mortgage in place that you have inherited in the deal.
Another possibility is that there are back taxes due on the property that need to be resolved before a transfer of title is completed. There could be easements restricting your usage of part or the whole of the property. A search will disclose all variances that could affect your investment.
An Abstract or Abstract of Title researches back to the original owner of the property, usually starting with the country of origin, and follows a detailed lineage to the present. It will disclose ownership in succession, conveyances, details of mortgages, surveys of the boundaries of the property and legal description, any code violations and compliances.
With inherited properties and purchases on foreclosures, a title search is vital, as it will disclose all outstanding claims and attachments to the property. Each country, state and province has specific guidelines and reports mandated to secure full disclosure.