Many first time home buyers sometimes wonder why they need to go through a title search.
Let's first define what a title report is, which is the process of search through the historical ownership and restrictions of real property.
- It makes a determination that the seller does indeed own the property and has the right to sell it
- It tells you about any types of land use restrictions on the property such as easements
- It looks for any liens or claims on the property for unpaid taxes, unpaid mortgages or mechanic liens.
Here are some possible problems that you could uncover:
- Unpaid or postponed property taxes. Postponed taxes are a program for seniors that allows the owner to postpone the taxes until the property is sold or refinanced.
- Old trust deeds from previous owners that may already have been paid and need to be removed from the public record.
- Previous trust deeds with private party beneficiaries, usually individuals that loaned money on the property, such as a seller carry back may be difficult to get removed, especially if many years have gone by. So a bond may be required in order to clear the title.
- Encroachments-If there is a common fence or driveway that encroaches on the property, the buyer will have to accept the property with the encroachment and the lender may decide not to lend on that property.
- Open bankruptcies will require the seller to get permission from to sell the property.
- Court judgements, while not common, can be issued for back spousal or child support.
Especially from a buyer's perspective this report is critical to the home buying process and is required in most instances.
For more in depth information, please check out this website for more detailed information: http://www.chicagotitle.com/DesktopDefault.aspx?tabid=27
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