Understanding Title Examination
When it comes to buying real estate, it’s important to ensure that the property has a good and marketable title. This means that no one else has any legal claim to the property. Therefore, it is crucial to undergo a title examination, which is a process that verifies ownership and ensures that the property is free from any legal issues or encumbrances. This blog will dive deeper into what title examination is and how it works.
What is a title examination?
Title examination is a thorough investigation of the ownership history of a property to ensure that it’s free from any legal claims or encumbrances. This process is carried out by a title examiner or an attorney, who examines all the records associated with the property, including deeds, mortgage documents, liens, and tax records. The examiner’s purpose is to verify that the seller has the right to sell the property and to uncover any potential problems that might be hidden in the records.
Why is title examination important?
The importance of title examination lies in the fact that it protects the buyer’s investment in the property. A clear title ensures that the buyer has legal ownership of the property and that no one else has any claim to it. Furthermore, title examination can uncover any issues that might affect the value of the property or make it difficult to sell in the future. For example, if there’s an unpaid mortgage or a lien against the property, a potential buyer might have to pay off the outstanding debt before they can proceed with the sale.
How does title examination work?
The title examination process involves several steps. First, the title examiner will start by conducting a search of public records to determine who owns the property and whether there are any legal claims or encumbrances. Next, they will compile a report that summarizes their findings and identifies any potential issues. Finally, the report is reviewed by the buyer’s attorney or title company, who will advise the buyer on any legal steps they need to take to resolve any issues before closing the sale.
Who pays for title examination?
Typically, the buyer is responsible for paying the cost of title examination, which can range from a few hundred to several thousand dollars. However, in some cases, the seller may agree to pay for the cost of title examination as part of the sale agreement.
Title examination is an essential step in the real estate buying process, as it helps ensure that a property has a clear and marketable title. It also provides buyers with peace of mind by verifying ownership and uncovering any potential issues that may affect the value of the property. Although it involves additional expenses, the cost of title examination is a worthwhile investment, as it protects the buyer’s investment in the property and avoids any potential legal issues in the future. As a buyer, it’s important to conduct due diligence in acquiring a property, and title examination is an essential part of that process.
