Title insurance and a title search can uncover issues tied to a property before you buy a home, and can protect you from title problems discovered after your home purchase has closed.
Some problems are more common than others, and it can help ease the pain of uncovering them by understanding these issues ahead of time. Here are some of the most common:
Public Records Errors
Clerical or filing errors could affect the deed or survey of your property, possibly costing you some money to fix.
Unpaid debts can lead some businesses to place liens on the property of the debtors, which may have to be paid before a home can be sold. If the previous property owner didn’t pay their tax bill or missed a few mortgage payments, their lender may put a lien on the home. A contractor who wasn’t paid for work on a home can do the same.
Forged documents are sometimes filed in public records, creating a potential ownership problem during a title search.
Property ownership can be passed on to heirs named in a will, but that information or the heirs may not come forward or be known for years after you’ve purchased a property. Or, family members may contest the will for their own property rights. Either of these could affect your rights to the property.
A property deed can pass from one owner to another for years and years before an illegal deed is discovered in a title search. The enforceability of prior deeds may be affected if the deed was made by an undocumented immigrant, a minor, a person of unsound mind, or someone who is reported single but is actually married. All can affect prior and possibly present ownership.
You own the home and surrounding land on the property you buy, but an unknown easement can prevent you from using the land as you’d like to. Easements are used by government agencies or businesses, such as the local power company, to provide services an entire community needs. They can allow part or all of your property to be accessed by these agencies. Finding an unknown easement in a title search probably won’t cost you money, but it could affect your right to how you use your land.
Whatever issues come up in a title search—either before or after you buy a property—buying extra title insurance can be worthwhile. Ask your title insurance professional what protections are covered and if you have to pay more for extra coverage.