So you’re brokering a sale or buying or selling a property, and the title search uncovers an issue that you were not aware of. What do you do?
For starters, any liens revealed in the title search report will need to be addressed prior to closing for the buyer to receive a free and clear title at closing. Often, especially for owners who inherit property, a title issue or lien may not be known. Along with tracing the full legal history of a property's ownership, a title search reveals any lien or encumbrances that are recorded against the property.
These issues can include:
Old liens: If a previous mortgage wasn’t fully paid off and a satisfaction of mortgage recorded, this old mortgage will still appear on the title search. The lender can still claim part of the home’s equity if they have not been paid in full, as the collateral (the property) has not been released. Likewise, if a previous owner has delinquent property taxes, the local government taxing authority can place a lien on the property.
Easements: Common easements include allowing a neighbor, or a local utility company, to access and use part of the property. Some owners, as time passes, forget easements exist until they are discovered in a title search.
These types of title issues don’t always delay a real estate transaction. The seller can resolve some of these problems, for instance, by paying off outstanding taxes.
Aside from these known issues that are revealed via a title search, various issues can arise that the title search doesn’t find — perhaps because of fraud or poor record keeping. When they do come to light later, they can undermine the new property owner’s investment. That’s where title insurance comes into play.
At Butler Title, we explain to property owners the importance of obtaining a title insurance policy. For a one-time fee, title insurance protects buyers from title problems that they don’t know about. The protection lasts as long as they own the property.
Since we extend the Butler Rebate to all our clients, our clients can get this same protection for less money. To learn about Butler Title’s title searches, title insurance, and other closing services, visit www.butlertitle.com.
Butler Title is a full-service, attorney owned and operated title insurance agency. We keep it simple and focus on what we do best: real estate closings. From first-time buyers to local moguls, BT provides an industry-leading fee structure and unparalleled experience.
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