Tag Archives: Abstractor

The Difference Between a Certified & Non-certified Title Search

certifiedA title search can mean different things to different people. One way to insure that the report you get as a “title search” answers all your questions and provides the necessary information you require is to get what is called a Certified Title Search. This means that the search is done to certain standards, that all the procedures are followed, and all of the places where potential clouds on the title might appear are checked when the title search is prepared.

Essentially, anybody can do a non-certified title search. If an individual goes to the land records office, visits all four or five of the offices, pulls all the necessary documents to review and reads through them to create a summarized report, you can call that a title search. Even if it is hand written on a piece of paper, you could name that a title search and some people might even be willing to pay for that and call it a title search. However, it would not be an official certified title search.

A certified title search is a research project performed by a NALTEA (National Association of Land Title Examiners & Abstractors) certified title abstractor or title examiner. These certified examiners and abstractors will do all the necessary research according to certain industry standards.  To be a NALTEA member an individual must pass a rigorous exam, demonstrate that they have experience in the industry, and continue their education every year by showing that they have attended training or other industry events to show that their knowledge is improving. These certified examiners are qualified and trained to know what to look for, to make sure all liens and encumbrances on a property are found and that all sources are checked. The format of a certified report also meets certain obligations that will hold up in a court of law, if need be.

What Is A Title Search And Why Do You Need One?

A Title Search is conducted for many reasons.  The most common is before the transfer of ownership interest from one party to another or simply put, “before it is sold”.  If the buyer is securing financing for the purchase, the lending institution usually requires proof of ownership of the seller and their right to transfer interest as well as to ensure that there are no outstanding liens or encumbrances on the property that may be associated with the subject property.  In some instances a lender may want to use this information for title insurance, thus adding a high level of security to the lenders investment.

Experienced investors routinely obtain title search reports.  One of the biggest mistakes commonly made by a novice investor, is the failure to obtain a Certified Title Report prior to a sale or auction   Sean O’Toole, founder and chief executive of ForeclsoureRadar.com says on MSN.COM  that a title search is your best chance of success and that “the title search is must.”

Litigation and property rights are other important reasons to obtain a title report.  For example:  What do you do if your home is being wrongfully foreclosed?  How do you resolve an ownership dispute?  Does someone else have the mineral rights to your land?  Do you suspect you inherited land from a deceased family member, but you can’t prove it?  What if you are being audited by the IRS or other government agency? Did you re-invest your capital gains into a piece of real estate in accordance with the law? How do you prove that you did?

The bottom line is, if you are buying, selling, financing, litigating or investing in a piece of real estate, it is part of your due diligence to obtain an official title report.

What is a title search?

1.      A title search is a process of determining who, from the official public land records, has the legal right of ownership to the subject property.  The answer can be as simple as a single person owning a house or as complicated as multinational corporations owning fractions of interest that may contain mineral rights, easements, contractual covenants, obligations and rights of survivor ship.

2.      There are two typical types of searches.  A Current Owner Search and a Chain of Title.  A chain of title search is just what it sounds like. It is the historical record of ownership from one party to another up until the present time.  A chain of title is usually for a specific period of time and is often used for mineral rights, litigation, title insurance and historical research.  A current ownership search looks at the subject property starting from when the current owner first took possession of the property.  This could be 2 weeks ago, or 2 centuries.  It is like a snapshot in time of the financial and legal standing of that property as it currently exists.

3.      A title search can show you if there are any open liens, mortgages, and deeds of trust or even other owners.  This information can be critical to determine who is needed in order to legally transfer the ownership to another party

4.      In addition to all of this, the title search provides the present status of real estate taxes and other municipal charges that may be due and payable from previous years.

5.      A quality title search will also contain a judgment search.  This is performed to determine whether there are any unsatisfied judgments, federal or state income tax liens, mechanic’s liens, bankruptcy or other judgments against the seller or prior owners that attached to the property.

6.      Some title search services may provide a list of “Comps”.  This type of information generally shows the buying and selling history of similar properties in the local neighborhood.  This information is important for home buyers, investors and developers.