How Title Companies Verify Property Ownership

Title companies play a crucial role in the real estate industry. They are responsible for ensuring that the property being sold has a clear title and that the ownership is properly verified. In this article, we’ll explore how title companies verify property ownership and why it’s important.

The Title Search Process

When a title company is hired to verify property ownership, the first step is to conduct a title search. This involves examining public records to determine the current ownership of the property and to identify any liens or encumbrances that may affect the title.

During the title search process, the title company will typically examine several different documents, including deeds, mortgages, and tax records. They will also check for any judgments, liens, or other encumbrances that could affect the title.

Verifying the Chain of Title

One of the most important aspects of verifying property ownership is ensuring that there is a clear chain of title. A chain of title is a history of all the owners of the property from the time it was first purchased to the present.

The title company will examine the chain of title to ensure that there are no breaks in the chain and that each transfer of ownership was properly recorded. If there are any gaps in the chain of title or if a transfer of ownership was not properly recorded, it could create problems with the title.

Checking for Liens and Encumbrances

Another important aspect of verifying property ownership is checking for liens and encumbrances. A lien is a legal claim against the property that is used to secure the payment of a debt. An encumbrance is any other type of restriction or limitation on the property.

The title company will check for any liens or encumbrances that may affect the title, such as a mortgage, unpaid taxes, or an easement. If there are any outstanding liens or encumbrances, the title company will work with the seller to ensure that they are paid off or removed before the sale of the property is completed.

Verifying Ownership with the County Recorder

Once the title company has completed the title search and verified the chain of title, they will typically verify the ownership of the property with the county recorder’s office. The county recorder’s office is responsible for maintaining records of all property transactions in the county.

The title company will verify the ownership of the property by examining the recorded documents, such as the deed and any other legal documents related to the property. They will also verify that the seller has the legal authority to sell the property.

Title Insurance

Even with the most thorough title search, there is always a risk that a problem with the title could be missed. That’s why title insurance is essential for protecting the buyer’s investment in the property.

Title insurance provides protection against financial losses related to problems with the title, such as a defective title or undiscovered liens. If a problem with the title is discovered after the sale of the property is completed, the title insurance policy will cover the buyer’s financial losses.

Conclusion

Verifying property ownership is a critical aspect of the real estate transaction process. Title companies play a crucial role in this process by conducting thorough title searches and verifying the ownership of the property. By working with our reputable title company in Eads and purchasing title insurance, buyers can have peace of mind knowing that their investment is protected against potential losses related to problems with the title.