When buying a new home or a piece of property, individuals must first verify property ownership and determine if the current owner is legally able to sell the property. A title search will turn up any liens or other legal issues with the property that could complicate or even prevent the sale. Title information is a matter of public record, so it is possible to perform the search on your own. Alternatively, there are a number of companies that perform title searches for a fee. If you choose to perform a title search on your own, it is important to understand its different parts to ensure you get the most accurate result possible.
Tax Assessor
Property tax records can be found at the office of a tax assessor, though many records are now available online. A tax assessor’s office is typically housed in a city or county building. These records will include the parcel number, lot number, a general description, and the tax history, both paid and unpaid of the property.
Titles and Deeds
Titles and deeds for properties are recorded in either the county clerk’s office or the clerk of courts, depending on municipality. These offices are generally located at the courthouse. When performing a title search, the most important things to find include:
- Name of the current owner. Be sure you are buying property from the legal owner, not simply someone who claims to be a representative of the owner.
- A list of outstanding liens or monetary judgments against the property. These must be satisfied before property changes hands, or the title won’t be released to the buyer.
- A list of any encumbrances that can significantly reduce the value of the property. An encumbrance means another party has an interest in the property. This might not prevent the title from being transferred, but could result in problems down the road.
- Names of lenders with a financial interest. This typically includes banks or credit unions that hold mortgages on the property which must be satisfied before the title is transferred.
Whether a home is being purchased through a short sale, auction, directly from the owner, or traditional means, a title search is an essential part of the buying process. Making sure the property you seek is free from financial restrictions should always be performed before committing to the property, as it can significantly reduce your risk of legal problems down the road. Some buyers might consider title insurance to protect them from encumbrances or liens if they are later discovered.
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