Solving Title Issues: How a Title Company Can Help

Purchasing a property is a significant investment, and the last thing you want is for the transaction to be held up by title issues. A title issue refers to any problem with the title of a property that could prevent a clear transfer of ownership. These issues can range from errors in the public record to outstanding liens or legal disputes. Fortunately, a title company can help to resolve these issues, ensuring that your real estate transaction can proceed smoothly.

A title company is an organization that specializes in examining and verifying the legitimacy of property titles. Their main purpose is to safeguard the buyer and lender from any potential title defects. Additionally, they function as an escrow agent, maintaining control of the funds during the transaction, and only releasing them once all the required documents have been signed, and the title has been cleared.

How Does a Title Company Search for Title Issues?

A title company conducts a thorough search of the property’s title to identify any potential issues. This process typically includes a search of the public records, such as deeds, mortgages, and liens, as well as any other relevant legal documents. The title company will also check for any outstanding taxes or assessments, and any judgments or liens that have been filed against the property.

Once the title company has completed their search, they will issue a title report, which lists any title issues that have been identified. The report will also indicate if the title is clear, meaning that there are no issues that would prevent the transfer of ownership.

Resolving Title Issues

If the title report indicates any title issues, the title company will work to resolve them. They will communicate with the parties involved, such as the buyer, the seller, and the lender, to try to come to a resolution. Some common title issues and how they can be resolved include:

• Outstanding liens: If the property has any outstanding liens, the title company will work to clear them before closing. This may involve paying off the lien or negotiating with the lien holder to release it.
• Errors in the public record: If the title company discovers errors in the public record, such as incorrect property boundaries or incorrect ownership information, they will work to have them corrected.
• Legal disputes: If there is a legal dispute over the property, such as a boundary dispute or a will contest, the title company will work to have it resolved before closing.
• Cloud on title: A cloud on title is any outstanding claim or encumbrance that affects the title of the property. The title company will work to clear any clouds on title before closing.

Protecting Your Investment with Title Insurance

Even after a title company has searched and cleared the title, there is still a risk that title issues may arise in the future. To protect yourself and your lender against any potential losses, it’s essential to purchase title insurance. Title insurance is a type of insurance that protects the buyer and the lender against any financial losses that may result from title defects that were not discovered during the title search.

If a title defect is discovered after the closing, the title insurance company will investigate and provide a resolution, which may include paying for any legal fees or any financial losses that result from the defect.

In conclusion

Title issues can be a significant obstacle in a real estate transaction, but a title company can help to resolve these issues and ensure that your transaction proceeds smoothly. A title company will conduct a thorough search of the property’s title to identify any potential issues and work to resolve them before closing. They will also ensure that you are protected with title insurance, which can provide financial protection against any losses that may result from title defects that were not discovered during the title search.

It’s essential to work with a reputable and experienced title company to ensure that your transaction is handled efficiently and effectively. A good title company will keep you informed throughout the process, and provide clear and timely communication to help you understand any issues that arise and how they will be resolved.

In short, title issues can be a major headache for anyone looking to purchase a property, but a title company can help to alleviate that stress by identifying and resolving any issues that may arise, while providing protection for your investment. With the right title company on your side, you can have peace of mind that your transaction will proceed smoothly, and you’ll be able to enjoy your new property as soon as possible.