Behind the scenes of every mortgage closing are some simple steps to protect you and your family when it comes to your property's title. Before a title insurance company can issue title insurance to protect your interests, they will perform a title search.
Title searches are a key ingredient to any real estate transaction and ensure that no issues come up later at closing or even years after you've purchased your new home. Your title search will involve searching title records for all matters pertaining to the title transfer and confirming there are no liens against your title. A title abstractor or examiner will summarize title info, list all documents chronologically from original owner to present, and list all liens against the title.
Your title search will follow this process:
1. Chain of title
The chain of title is the first step in the title search process. Your title examiner will research historical transfers to the title starting with the original owner when the property came into existence. Typically, these records can be found at the County Clerk or Records Office. If the chain of title can not be traced completely, it creates a cloud which will need to be clarified before closing.
2. Tax Search
A tax search is then performed to check on the present status of real estate taxes against the property. Any unpaid taxes or special assessments will create a lien on the property which must be paid by the seller before title insurance can be issued.
An inspector is sent to the property to check for any encroachments and to verify the lot size listed on the title. Any discrepancies or encroachments will need to be addressed before the title can be transferred.
4. Name and Judgment Search
The title examiner will perform a name and judgment search to check for any unsatisfied judgments against the previous owner. Unsatisfied judgments will create a lien against the property for the amount owed. General liens against the property create claims on the property and must be eliminated by the seller before the title transfer can take place.
5. Title Insurance and Closing
Once your title has been through the previous four steps, your title examiner will submit a report to your title insurance and closing companies. After clearing up any title issues, your title insurance will be issued and closing can be scheduled.
An investment in a new home or other property is an investment in the future. You'll want to ensure that your investment is safe with the title search process and title insurance. Here at Twin City Title, our title examiners follow these steps to give both lenders and buyers peace of mind in the purchase process. You can get started by talking with one of our knowledgeable staff today.