how title searches work
as noted above a title search determines whether there is a clean title on a piece of property or whether there are liens or other defects such as public record errors which prevent it from being transferred between parties the process normally takes place for real estate transactions such as the buying and selling of homes or for the purchase and sale of automobiles a title search is usually performed by a title company or an attorney on behalf of a prospective buyer who may want to make an offer on the property the process may also be initiated by a lender or other entity to verify property ownership in order to determine whether there are claims or judgments against the property this process is normally conducted before approving a loan or other credit that uses that property as collateral in order to perform the search the requesting entity conducts research using public records and legal documents to identify the vested owner the liens or other judgments on the property the loans on the property and the property taxes due while it is possible for a prospective buyer or another individual to conduct a title search on their own it is not generally recommended legal documents can be confusing and gaining access to courthouse records can be a difficult process homeowners who want to refinance their home loans may also choose to conduct a title search special considerationsan attorney or a title company will search public records on a property s ownership before you close a deal on the purchase of a home as a prospective homebuyer once the search is finished you will receive a preliminary title report if there are any issues or problems with the title you can point them out to the seller depending on the exact nature of the issue you can decide whether you want to go through with the purchase of the property you will likely want to include your attorney and real estate agent in these discussions some problems discovered via a title search are easily cleared up while others may take so long that they jeopardize your loan commitment a title search confirms a property s legal ownership and identifies whether there are any claims on the property while a clean title proves sole ownership of a piece of property or land a dirty title indicates that there is a cloud of uncertainty or discredit hanging over the property or land erroneous surveys and unresolved building code violations are examples of title search findings that could result in a dirty or defective title designation for instance a dirty title may have unknown liens on it or a filing clerk at the county office could have misspelled or misapplied some information when it came time to register the title in lieu of title insurance some private transactions can involve a warranty of title which is a guarantee by a seller to a buyer that the seller has the right to transfer ownership and no one else has rights to the property even a company or professional experienced in conducting title searches can occasionally miss something or there can be a paperwork error that leads to a document being overlooked mistakes can happen and these mistakes can be costly if you discover there s an issue with the property after you complete the purchase this is why buyers often purchase title insurance which can protect you and your mortgage lender from financial loss if a title related problem arises during or after the sale title insurance protects against loss or damage occurring from liens encumbrances or defects in the title or actual ownership of a property unlike traditional insurance which protects against future events title insurance protects against claims for past occurrences a basic owner s title insurance policy typically covers the following hazards example of a title searchhere s a hypothetical example to show how title searches work let s assume that you want to move to a bigger home you ve seen a few properties but there s one that piques your interest just a little more than the others you decide to make an offer as the buyer you want to ensure that the property is free and clear of any liens encumbrances and other defects that can prevent you from completing the purchase so you hire a title company to do the work for you the title company will take a few steps to determine if the title to your prospective home is clean or defective this involves gathering legal documents relevant to the property by scouring through public records as well as going to courthouses and county offices the company amasses all the information it finds to you you can go through with the transaction if the title is clear but if there are any defects the transaction cannot be completed some defects may be easier to clear up than others such as clerical errors versus liens against the home 