There are several different reasons people choose to get a title search done on a property. Forbes lists unreleased mortgages, incorrect liens, property vesting, document fraud, prior owners records, assessed value, deed copy, other party mortgages, pre-purchase research, and after sale verification as the Top 10 Reasons to Check Your Property Title Search. Here is a little more in depth look at a few reasons people get a title search.
- Verify Ownership: When purchasing a property, the ownership of said property should be verified to make sure that the person being dealt with is the actual owner of the property and has authority to sell it. A title search can confirm if the ownership is current, if there has been a transfer of ownership, and make sure there aren’t any other owners by looking at vesting. A title search will list if the property is owned solely by an individual, jointly, or by a corporation.
- Liens: If there are liens on a property, a future owner, investor, or a current owner will have some type of obligation that could stand in the way of a sale, refinance, or other uses of the property. When looking into a lien on a property you should find out what type of lien it is, when it was recorded, and who is owed money.
- Mortgage Status: By taking a look at mortgages you can see who the mortgage holders are, if there is a first mortgage or a second mortgage, what the amounts are, and if it is through MERS. You will also be able to find out if any of the mortgages are in default or if there are foreclosure filings.
- Verify Legal Description: The legal description is a description of the actual parcel that combines to make the property location. It is usually two or three paragraphs of text detailing the boundaries of the property. It is wise to check if a property’s legal description matches the parcel that is being contemplated and that the boundaries of the property are what is expected by the buyer. Checking for encroachments on a property, such as a fence or extended driveway could affect easements as well.
- Check Document Details: When getting a title search don’t just look at the title but also look at the terms and conditions of mortgages, the interest rate on liens, and the other details of the document. The deed to a property might allow for the use of the property by a third party or have restrictions such as a life estate. It is best to know all the details of the document so you have a clear understanding of the property and ownership.