One of the most important steps to buying, selling, or transferring real estate is the title search. This is the process of retrieving documents in the public record that tells the story of the property, as far back as the records go.
Why is it so important to do a title search on a property before it transfers hands? Because the seller’s name on the deed does not necessarily mean they have the right to sell the property. Moreover, obtaining the title may not mean that the buyer gets to use the property in the way they intended. Restrictions, tripwires, and landmines could be hiding in the title history.
These obstacles could stop the sale in its tracks, a disappointing and potentially costly development. The buyer could have sunk time and money into due diligence; the seller could be counting on a successful closing to cash out and settle debts. If the sale falls apart, everyone loses.
How to Do a Title Search on a Property
Technically anyone can perform a title search. After all, these documents are part of the public record. They might live, online or in hard copy, at public repositories like:
- The County Recorder or Clerk.
- The County Tax Assessor or Appraiser.
- City, county, or state courthouses.
- The public library.
However, performing a title search can be a long and tedious process. Some records can be searched online, but learning how to do a title search online may not be as simple as a Google search. Other documents may have to be requested by phone or by mail. Sometimes you have to dig through actual paper archives. Make one mistake, and the sale is in jeopardy. Many people seek professional help from companies like biproxi to perform an airtight title search.
What Are the Steps of a Title Search?
A title search usually involves the following steps:
- Chain of Title. A comprehensive record of every past owner and the circumstances of ownership change.
- Tax Search. A historical record of tax assessments and tax payments.
- Inspection. A physical inspection of the property and comparison with a current survey.
- Judgment Search. A search for court judgments and court liens against the seller that may hold up the sale if left unsettled.
Identifying the Property
We usually identify property by the street address or mailing address, but to perform a title search, we need to know the property’s legal address. You can find this address on the deed, mortgage note, property tax records, or other legal documents pertinent to the property. It will be needed to find all documents relevant to the title search.
The legal address is usually a great deal longer and more complicated than the street address because it must exactly describe the boundaries of the property, not just where the mail goes. Three main methods could be used to describe the property legally:
- Metes and Bounds. An older method, dating back to the Feudal era, used for irregularly-shaped properties, which describes the property based on a description of a series of landmarks. Example: “Beginning from the oak tree located at X, bears 45 degrees east 1,000 feet, at which point of beginning an iron stake has been placed, thence 500 feet southeast to a riverbank …” etc.
- Township. Some counties, cities, or towns are divided into a “township” grid and describe property based on its position within that grid. Example: “Southwest quarter of southeast quarter of Section Six, Township Five …” etc.
- Lot and Block. Many cities or towns record named or numbered “subdivisions” of properties, with individual properties in that subdivision identified by lot and block numbers within that subdivision. Example: “Lot 5, Block 2, Circle C Subdivision, Travis County…” etc.
Checking Property History
Once you know the property’s legal description, you can begin a comprehensive search of the property’s recorded history. This search can reveal …
A thorough title search will yield a complete record of the assessment and payment of property taxes. If property taxes have not been paid, the taxing authority may be entitled to place a lien on the property. This lien is superior to any mortgage lien. The property cannot be sold or transferred without settling the tax lien.
Liens & Mortgages
Any mortgage on the property records a lien against the property, which allows the lienholder to foreclose the property under certain circumstances dictated by law. Usually, all liens must be discharged before property can be sold or transferred. In the case of a mortgage, this means paying off the principal balance and retiring the debt.
A “subject-to” sale might successfully transfer title without settling a mortgage lien, but beware—the lienholder typically has the right to call the loan or foreclose the property.
Liens may also be placed on properties by court judgments against the property owner, so a judgment query with all jurisdictions is critical to a comprehensive lien search.
Property ownership usually implies the right to do with that property whatever you please (within the limits of the law). However, sometimes restrictions on the use of the property are written into the deed. You need to know about any deed restrictions that transfer with the property title. If you don’t want to abide by those restrictions, you will have to sue for them to be removed.
Common deed restrictions uncovered by a title search include:
- No hunting.
- No mobile homes.
- No storage of junk.
- No subdivision (splitting the property into smaller parcels).
- No livestock.
Easements are a special kind of deed restriction that allows some sort of public access to the property. For example, an easement may allow the general public to walk on a trail that technically crosses the property to access a public lakefront. Unless you can get the easement lifted, you can’t legally use “No Trespassing” laws to keep people off the trail.
Working With a Professional
Even with new-construction properties, a title search is usually time-consuming and highly susceptible to human error. When it comes to doing a title search correctly—and in doing so, ensuring a successful sale closing—experience and training matters.
That’s why most people hire a professional to do a title search. The cost of a professional, reliable title search is far outweighed by the cost of a property transfer that fails or faces delays due to unexpected title complications.
biproxi offers affordable title search solutions backed by a professional guarantee. Get your Title Search quote now.