Property Title Search: What Is It, and Why Do I Need It?
Buying or selling any home is a complex process, and this is true even when buying a vacation property around Lake Wallenpaupack or anywhere. My job as a buyer advocate is to help make buying your lake house as easy to navigate as possible.
Chances are, you’re going to come across some terms along the way that may be new to you, including “title search” and “title insurance.” This information may seem dry and boring, but I’ve done my best to explain it in laymen’s terms to make it easier to digest.
What is the property title search?
The title search is an important part of any real estate sale and it serves an important purpose for both buyers and sellers of vacation homes, first-time home purchases, and retirement and investment properties.
A property title search is a search done after an offer has been accepted on a home or property. During the process, a variety of sources are researched (for example, deeds, tax liens, bankruptcy court records, county land records, and other public records) to discover if there are any liens or financial judgments that could negatively impact the transfer of the property to the new owners.
Why are property title searches important?
Property title searches are important for both buyers and sellers. For sellers, a property title search proves that you have a “marketable title,” legal speak for the title being free of defects. This is also referred to as “clear title.” A title defect is also known as a “cloud” on the title. Title defects can be costly to correct and take a significant amount of time to complete.
On the buyer’s side, a property title search ensures any pre-existing financial judgments are dealt with before closing on the home, which will help them avoid any stressful, expense surprises down the road.
If the title has been searched, and is free of defects, why is title insurance needed?
First of all, if a buyer is using a mortgage to purchase the property, the lender will absolutely require title insurance, to protect the lender’s interest in the property. Title insurance provides protection from title defects that may have been missed or not discovered during the examination of title. These defects can include forgery, fraud, long-lost heirs, old taxes or liens against the property.
Stay tuned for my next riveting and exciting post: What Types of Title Insurance Are Available & What’s It Cost?