You’ve been looking for a new home for some time now and something has finally caught your eye. After several viewings, you are now contemplating making an offer.
It’s easy to get carried away when looking for a new home, but it’s important to carry out due diligence before committing to a purchase. Part of this due diligence includes conducting a title search. Outlined below are a few reasons why a title search is so important.
You can uncover liens
For some individuals, selling real estate is a way to recoup money that they may have lost. There is nothing wrong with this as such, but as a buyer, you need to be wary of liens that may have been placed against a home. There are instances wherein a lien may go unnoticed. In other words, the seller had no idea that a creditor had a legal right to use the property as collateral to satisfy the debt. As the lien is attached to the property rather than any individual, you could be responsible for paying the outstanding debt as the new homeowner if the transaction goes through before a lien has been noticed and properly addressed by a seller.
While liens are usually settled by the seller before a real estate transaction goes through, there are occasions where the seller may opt to try and conceal this information. Purposely concealing a lien is a fraudulent action on behalf of a seller, for which you can potentially hold them accountable.
A title search will highlight outstanding liens and give the seller the opportunity to settle the debt before you commit to the purchase. Fortunately, this is what happens during most real estate transactions.
Finding the true owner
In most real estate cases, it’s easy to identify the true owner of a given property. When it comes to older property or property that has been inherited, however, this isn’t always the case. It may sound obvious, but when you are purchasing a property, you want to make sure that it is the true owner who is selling it to you. It is not unheard of for a forgotten heir to stake their claim to a property in the middle of a deal or even after a sale has concluded. This is not an easy situation to resolve, so it is best to avoid it altogether by conducting a title search.
Title issues are just one potential hurdle in real estate deals. To ensure that your rights are protected, make sure you have legal guidance informing your decisions as you move forward.