What is a title search on property?
Key takeaways
- A title search ensures that there are no hidden claims on the property that could impact the ownership rights of the buyer.
- The search is typically performed by a title company or attorney and can take between 10 to 14 days to complete.
- Title searches can be more complicated on older homes than new homes, as they have a longer history and chain of ownership to be scrutinized.
After your home search ends, there’s still one more search to perform before you can move into your new place: the title search. While a title search might not be as exciting as browsing those listings or checking out open houses, it’s a crucial step in a real estate transaction — and any issues that turn up could have serious implications for your home purchase. Here’s what you need to know.
What is a property title search?
A title search is the process in which a title company or attorney examines public records to make sure that there are no claims, liens or issues with a property that could result in another person or entity asserting they have a stake in the home. It protects both homeowner and lender from nasty surprises — namely hidden claims on ownership of a property. It might be helpful to think of it as similar to an employer’s background check.
“This search is conducted to ensure that marketable title to the property can be obtained, and that no encumbrances affect the property rights of the purchasing party,” says Sarah Stitgen, an attorney with the Cook & James firm in Roswell, Georgia.
A title search is mandatory for any real estate transaction that requires title insurance. This includes homes purchased with financing, as mortgage lenders require a title search in order to provide funds for the loan.
Who performs it?
An attorney or title company usually performs the title search, which is most often initiated after the home seller and buyer execute a contract. The steps involved can vary depending on location, however.
“In New York City, the search is done by independent title companies,” says Greg Maybaum, a real estate attorney in New York City. “Once the contract is signed, the purchaser’s attorney typically orders the title search, and either that attorney or the title company provides the completed report to the seller’s attorney. It’s the seller’s attorney’s job to then manage and address title issues with the title company.”
The company or attorney generally does the sleuthing either online or at the office of the county or municipal clerk where the property is located. “This person reviews many sources of information related to the property,” says Suzanne Hollander, an attorney and real estate professor at Florida International University in Miami. These can include:
|
|
A thorough title search will also likely include details about mortgages attached to the property, street and sewer assessments, taxes and any other problems present, says Hollander.
How long does a title search take?
Some searches can be completed in as little as a few hours, but in most cases, a title search will take between 10 and 14 days. In general, the older the home, the longer the title search. If there’s a lengthy string of owners and transactions involving the property — a home equity loan against it, for example, or a past property line dispute — there will be more work involved to make sure the title is clear.
“The search may go back as far as 50 years, or as far back as needed to identify the root deed and review each subsequent transfer of the property,” says Stitgen. “This ensures there is proper chain of title moving from grantee to grantee, all the way through the current owner.”
How much does a title search cost?
Buying a home includes plenty of expenses outside of the actual home price, and the title search will add to the overall tab. There are two main costs for title services provided by a title company or attorney:
- Settlement service fees: These will include the title search fee and the cost to resolve any issues discovered. The price to conduct the title search alone often ranges between $75 and $100, or sometimes up to $200, and can be paid for by either the buyer or the seller (who covers this fee is often negotiated).
- Title insurance premium: Buyers are generally required to purchase a lender’s title insurance policy, which protects their lender in the event of a claim dispute. This premium is a one-time cost, often set by the state you’re buying the home in.
What happens if the title search finds issues?
A title search might uncover one or more problems with the title. Here are some common title issues, along with corresponding strategies to resolve them:
| Title issue | Potential resolution |
|---|---|
| Break in the chain of title | “If party A conveys property to party B, and then party C conveys the same property to party D, we are missing the link between parties B and C,” says Stitgen. “This can be resolved by obtaining a deed from party B to party C, or a deed from party B to party D.” |
| Improper or missing legal description on the deed | These errors are common, and depending on the nature of the incorrect information, it typically requires getting a corrected deed from the same parties. “In some cases, an affidavit from a scrivener, preferably the party who drafted or recorded the document, may suffice to solve the problem, but only if the mistake is non-material and doesn’t change the nature of the legal description,” says Stitgen. |
| Potential missing interests | When the title chain includes a transfer via an estate, it’s essential to make sure any heirs have properly relinquished their interests in the property. “If this has not been done, it will be necessary to obtain [quitclaim] deeds from these parties releasing their interests,” says Stitgen. |
| Open security deeds | The title search might uncover an open security deed from the current or prior owner that was never released. “If so, some research needs to be conducted to determine if this was left open in error,” says Stitgen. “If it was, you’ll need to obtain a release from the holder of the security deed.” |
| Liens | A lien is a legal right or claim on a property that is commonly used as collateral to fulfill a debt. A title search will often identify potential liens on a property, such as mechanic’s liens for unpaid home improvements. These will require extra research to learn whether the lien is valid and needs to be paid. |
| Unpaid property taxes | Any outstanding property or “ad valorem” taxes, which are based on the assessed value of the home, will need to be paid before transferring the title to the new owner. If the tax lien certificate has been sold, this will need to be bought back from the holder. |
If any of the above (or other) issues are found, homebuyers generally have three options, depending on what’s allowed in their purchase contract, according to Hollander:
- Ask the seller to resolve the issue before closing.
- Ask the seller to compensate the buyer for the cost to fix the issue.
- Walk away from the deal and receive a refund of their deposit.
Can I do my own title search on my property?
Anyone can search property records through their county clerk’s office, and there’s no law that says you can’t conduct a title search yourself. However, there’s a reason why this task is often reserved for attorneys — experts strongly recommend against trying to sort through the details of a property title on your own.
“Conducting a title search requires knowledge of real estate requirements and lien periods, and the ability to navigate various courthouse records. It’s not advisable to do this without experience, due to the complexity of records and indexing,” says Patti DeGennaro, an independent consultant and former chief implementation officer at Title Alliance, Ltd., in Media, Pennsylvania.
A DIY title search might also create challenges for securing title insurance. “If you wish to purchase title insurance for your property, conducting the title search yourself will not suffice because the title insurer will require that a professional conduct, review and advise on the search prior to issuing a policy,” says Stitgen.
FAQs
-
A property’s title is the term used to describe the rights of the owner. It isn’t a document, like the deed, but instead “refers to the concept of ownership rights,” says Megan Hernandez, director of marketing and public relations at the American Land Title Association. If you’re buying a home, you want to make sure that the seller is the only one who has claim to the title. This confirms that there are no other claims on the property, and that the seller does, in fact, have the right to sell you their home in the first place. That’s where a title search comes in.
-
Each transaction is different, but they typically take between 10 and 14 days. Title searches will usually be quicker for newer homes and slower for older ones: A newer home typically has a shorter paper trail, and therefore fewer documents to scrutinize. An older property can have a longer title chain and more records, which can extend the time required for review.
-
These terms might seem synonymous, but they describe legally distinct concepts. Title to real estate is simply its ownership status; the deed is the document used to transfer the ownership.
