Why Mortgage Lenders Require a Property Title Search
When buying a home, you’ll need to go through several legal steps — including an inspection, appraisal and property title search – before you can step inside your dream house. While a property title search may seem like just another hurdle to cross, this important step can help protect your future investment and ensure that you’re purchasing a valid deed to the property.
A property title search is an examination of the records on a piece of real estate, such as land surveys and county or municipal records. A lawyer or a title company generally conducts this sleuthing. They will review deeds on the property, liens attached to the property, mortgages and legal descriptions of the land, as well as court records, bankruptcy cases, divorce proceedings and probate issues that might impact ownership rights.
The primary justification for property https://techbattel.com/inside-calgary-registries-ne-a-closer-look-at-services-and-solutions/ title searches (and why mortgage lenders tend to require them) is to verify that a seller actually has the right to sell their home and that there are no legal obstacles that would prevent this sale. This is especially true for foreclosures, which can result in the property reverting back to the lender, making it difficult to sell.
Problems that might be discovered during a property title search include invalid or fraudulent deed transfers, legal description errors affecting the size and boundaries of the property, encroachments on adjacent properties or disputed easements, which can limit the use of the property, and other issues such as unpaid taxes, mortgages or liens resulting in a debt that could pass to the buyer upon purchase. A search can also uncover forged or erroneous documents submitted to the housing authority, as well as undisclosed wills ceding the property to other heirs and potentially posing obstacles to a sale.
Lastly, the title search will identify any restrictions on the property, such as homeowner’s association requirements or other limitations. These can impact the property’s value and your ability to enjoy it, so it’s best to find out these limitations upfront.
A good property title search can provide peace of mind for a prospective buyer and allow them to proceed with confidence to closing. A title search can also protect a lender, who will require that any outstanding debts and liens be paid off in order to clear the deed before they will loan money on the property. If a title search uncovers an issue, the seller can either address it with the lending institution or drop out of the transaction completely. For a potential buyer, this can be heartbreaking, especially after the long journey to get to the closing table. The best way to avoid this scenario is to have a thorough property title search conducted by an experienced professional, such as Matus Law Group, before you commit to the sale of your new home. Contact us today to learn more about how our team can guide you through the process. And don’t forget to request a free property title report to begin your search.
You May Also Like
