Clear and Marketable Title - You Must Have Both

Are you sure there are no clounds on the title? Sometimes, one title search may not be enough.

 I sold 3 building lots in VA a while back. ( Same owner). All 3 lots sold, all 3 had title searches and title insurance, and I was glad to be done working in that area. Then I get the news. The buyer of one lot went to get his construction financing from a bank in Clarke county which did their own title search. Their title seach discovered the words " unborn heirs" in the will of a previous owner. This caused the title to become not marketable. It was considered clear since their was little chance some grand kid would read his grandparents will and notice that they are one of the unborn heirs and should have inherited that property. The buyers construction financing was held up until we could clear up the title issue. I had to hire 2 law firms to avoid a conflict of interest. One law firm to represent the live owners that were selling the lots, and another lawyer to represent the unborn heirs.

 Yes, the judge required that the unborn heirs ( past and future) be represented in court even though they weren't born and weren't present now. We had to track down all the living unborn heirs and get them to sign a release that they had no ownership interest in the property. The ones that couldn't be found can't come back later and say they were suppose to inherit the land and were owners of the property, because now we can say that all previous, current, and future unborn heirs were represented in court by an attorney that approved the sale. $7000.00+ and several months after the sale, all lots have clear and marketable titles, and buyers have built their houses.

 Not all Title companies are the same, and not all Title insurance companies are the same. Title insurance was useless in this case. In the 2005-06 rush, I know many compnies rushed the title searches and onlt went back a minimum amount of years. I would bet many title defects were overlooked or ignored during that time.

 Funy how 2 little words can create such a huge mess. I do pre-listing title searches more often now, especially with all the short sales these days, just to identify clouds and defects sooner, and give myself more time to correct them if possible.