Unresolved title issues can prevent a home sale from happening, so it’s important to settle these issues if they are present. However, it’s not advisable to go about this on your own as third parties like title companies and real estate attorneys can help you identify and resolve property title issues.
Title companies and attorneys
Title companies research the property in-depth, looking at public records like wills, trusts, past deeds, bankruptcy filings, divorce decrees, court judgments, and tax records to ensure the home title is legitimate and has no defects. The company can also provide title insurance to protect against any future issues should they arise. They provide this insurance to cover the lender and buyer if any losses related to title issues occur.
Real estate attorneys or closing attorneys can help settle any title issue that might arise, such as ownership or boundary disputes, contested lien or will, and more. A title attorney can ensure you come out with a clean title at closing. When looking for a title attorney, make sure it has worked with many clients and has a stellar track record. Remember that this will cost some money, so be ready to shell out on attorney fees.
What are not title issues
Some issues that crop up may seem like title issue, but in fact are not. Below you will find a list of common issues that buyer’s regularly confuse as being an issue with “title”. But these issue do not normally prevent the sale because of a cloud on title. Instead, ignorance and fear causes the buyer to demand that the seller “cure” these items, which the seller may not be obligated to resolve before closing.
Code violations with no liens
Code violations without liens may include trash/junk on the property, inoperable vehicles, trees and vegetation, noisy pets, improper fencing, or obstructing walkways and driveways. A violation without a lien is not a cloud on the title.
Open permits with no liens
A property with an open permit and needing completion before passing inspection does not constitute a title issue. Unless your contract requires you to close the permits before closing, this shouldn’t obligate you as a seller to cure the issue.
What are title issues?
A title issues are potential threat to a current owner’s full right to sell a property. The property has a publicly-recorded issue, like a lien, mortgage or judgment that gives another party a claim to the property.
A judgment lien attaches to real property when the owner or an entity files a lawsuit against a defending party and loses in a court of law.
Wrong legal descriptions
A deed may contain a mistake in the description in the documentation, which makes it defective and negatively impacts the chain of title.
Improperly executed deeds in the past
Execution of deeds with mistakes and have not been vetted could cause title problems.
If the previous owner of your home passed away before selling the house, their heirs might come forward claiming ownership of the property.
Public record errors
Clerical or filing errors in recording a home’s deed can occur, but an early title search can reveal this to be resolved.
A common name can be mistaken for someone else facing judgment and a lien filed against your property mistakenly.
Survey and boundary disputes
Property boundary issues can arise when your survey and that of your neighbor clashes. This could lead to shared ownership of conflicting property – an undesirable situation.
It’s important to know what are and what are not title issues that you need to resolve in order to transfer the property. By knowing the difference, you can determine whether the contract requires you take action (which can be expensive) or not.