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If you’ve ever tried to buy a house, you’ve probably heard of a title. A title, specifically a property title, is a document that certifies ownership of an asset.
Naturally, when you buy a property, you and your mortgage lender want to ensure the title is accurate. For this reason, you’ll want to conduct a property title search.
With a property title search, you can confirm that there’s only one claim of ownership on the property. This enables you to buy the property without competing legal claims to property ownership or related issues.
To better understand a property title search and how it works, let’s take a closer look at what happens during a search and what information you can glean from it.
What Is a Property Title Search?
A property title search is simply a search for any parties who can claim ownership (or partial ownership) of a piece of property.
These searches are often conducted when you want to buy a new home. Before you sign the necessary paperwork to buy a home, you need to run a property title search to ensure the title is “free and clear.” This means there are no potential issues, including but not limited to:
- Zoning violations
- Outstanding lien(s)
- Bankruptcy of the current property owner
- Claims of ownership by a third party during probate
- Local ordinances that prevent your desired use of the home
- Existing mortgages on the home
- Claims to parts of the land by neighbors
- Building code violations
- Encumbrances like unpaid property taxes
Much of this information is a matter of public record, which means you could find it on your own. However, certain documents or pieces of information may be more complicated to attain or interpret unless you’re familiar with conducting a property title search.
So if you’re unsure what to do about issues on a title report, always consult an expert like a real estate attorney or a title company.
Why Are Title Searches Important?
Any claim on your home can cause issues for you down the road. Additionally, any financial obligations on the property left unmet by previous owners may complicate the buying process or make you liable for unpaid debts.
The three most common issues arising from a title with “defects” are liens, debts, or encumbrances. We’ll go into further detail about what these terms mean when you’re trying to buy a home below:
A lien is a claim against a real property by a lender or other party. If the previous owner of a home fails to pay their debts, the lender or other lienholder can claim the property in the absence of debt payments. When a search pulls up a lien on a home, you can’t proceed with buying the house until the lien has been released.
Like a lien, debts owed by the previous or current owner of the home could put the status of the property title in question. For example, the bank could initiate foreclosure if the owner has a mortgage or other debts that have gone to collections.
In this case, you’ll likely need to buy the house at auction. Additionally, purchasing a home with unpaid debts is risky, as you could inadvertently take responsibility for someone else’s overdue bills.
Encumbrance is a broad term that encompasses any defect preventing property title transfer from one person to another. Typical encumbrances include unpaid property taxes or homeowners association fees. To learn more about these issues, be sure to check out our guide on encumbrances.
How Does a Title Search on Property Work?
Every time a property is bought or sold, the title transfers from the seller to the buyer. A house has been purchased and sold multiple times; this creates a “chain of title.” This is a record of all of the owners who have, at one time or another, claimed ownership of the title.
Copies of title documents are typically held by your local county recorder’s office, county clerk’s office or the county courthouse. This way, you and your attorney (or an appointed individual) can research who has a claim to the title of a property.
After conducting a property title search, you’ll either find defects that need to be addressed or (ideally) that the title is free and clear. If there are no defects or issues preventing transferring the title, you can proceed with purchasing the home.
Once this has been done, you’ll be given a bundle of rights for the property. A bundle of rights outlines what you can do with the property under local ordinances, HOA rules, and state and federal laws.
The person who performs title searches
Several people (or entities) can perform property title searches.
- A real estate agent or attorney: Your real estate agent or a qualified attorney can perform a property title search to help speed up the home buying process.
- Abstractor: An abstractor is an individual responsible for looking through public land records and researching any documents pertaining to the property. More specifically, they look for any information that could affect the transference of title when someone buys or sells a home.
- Title company: Abstractors typically work for title companies that specialize in property title searches. In addition to simplifying the process, title companies can offer competitive rates to find the past or new owner’s name.
- DIY: While you can always do a property title search independently, it’s not recommended. You could easily miss important information if you’re not well-versed in real estate laws and local ordinances. So it’s best to leave these types of searches to professionals.
The time title searches take
A standard property title search will take anywhere between 2 – 4 weeks. For example, in California, public records (including property title searches) are disclosed within 10 – 30 days of the initial request. However, various factors can either speed up or slow down this process.
Let’s say a house is brand new and has only had one owner. You could probably get the results of the property title search in less than 10 days (depending on any public record fees and the processing times in your state). On the other hand, if you’re trying to buy a home that’s been standing for decades and has had many owners, it could take a month or longer to finish the search.
The cost of property title searches
On average, a property title search on a home will cost between $75 – $200. This amount varies based on who’s searching, how long it takes and any fees required to access certain records. You can save a bit of money if you do everything independently.
However, as previously mentioned, it’s best to leave property title searches to the experts. It may cost you an extra $100 (more or less), but it’ll save you the trouble of tracking down all the correct documents on your own.
Title searches by state
Every state manages its property records, meaning the process for accessing title records can vary from location to location. As mentioned above, California’s property title search can take anywhere from 10 – 30 days through the Franchise Tax Board Disclosure Office. Like many other states, the fees are small (10 cents per page) and apply whether you request physical or electronic copies.
Alternatively, New York state uses the Automated City Register Information System (ACRIS) to allow you to conduct property title searches electronically. Using this system, you or a designated third party can access relevant property titles and documents in minutes. ACRIS is free to use, though you may have to pay a fee to download your documents.
As you can see, property title search processes and even costs can differ from one state to the next. While you can depend on a lawyer, abstractor, or real estate agent to conduct a property title search on your behalf, you should still familiarize yourself with the process in your state. This way, you’ll have a better idea of the costs and timeline for getting the information you need to buy a home.
What Can You Do if There Are Issues with the Title Report?
If you or a third party encounter issues (known as “clouds”) on a title report, you have a few options to resolve. The seller will need to pay debts if there are debts, as most home buyers won’t want to buy a home until all debts have been paid. If you’re trying to buy a home, make it clear that you won’t finalize the purchase until the debts have been paid.
Alternatively, you can request a quitclaim deed if other people can claim the property. A quitclaim deed is most often used when a clerical error results in an illegitimate claim to the property. In essence, a quitclaim document states that the other party willingly forfeits their claim to the property.
Title Searches: How To Find Out Who Owns a Property
It’s important to remember that a property title search is a handy tool, particularly if you want to buy or sell real estate. While the process and cost can vary by location, you can find all the information you need with a knowledgeable attorney, abstractor, or real estate agent. If you feel confident enough, you can even conduct a property title search on your own!
NYC Department of Finance. “ACRIS.” NYC.gov. Retrieved September 2022 from https://www1.nyc.gov/site/finance/taxes/acris.page
State of California Franchise Tax Board. “California Public Records Act.” Franchise Tax Board. Retrieved September 2022 from https://www.ftb.ca.gov/your-rights/california-public-records-act.html