When real estate is bought and sold, part of the closing process always includes a title search. Title searches are included to ensure that a home’s title is free and clear and to ensure that there are no public records errors that could negatively impact the purchase. During a title search, municipal or county officials will comb through documents associated with the property. Sometimes these documents are many decades old. This includes judgements, street and sewer assessments, taxes and more. Here’s how mistakes in any of this information can affect a home’s title.
Any homebuyer wants to purchase a home that has a free and clear title that gives them full rights to the property without any encumbrances. Sunnyside Title Insurance Agency knows that both big and small title issues alike will need to be addressed and corrected before the sale of a home. The bigger the issue, however, the more time consuming and expensive the resolution will be. For instance, if there is a home description that lists the property’s square footage as lower than what it actually is, a buyer may find themselves unable to get the bank to offer them a loan that will cover the full cost of the home.
There are many types of liens, but mechanic’s liens are one of the more common liens that impact home titles. These liens are levied against a homeowner anytime a general contractor or other property service provider before beginning work on the home. This is payment insurance and protection for servicers. Once the job is complete and paid for, the lien is released. But sometimes the contractor fails to file the necessary “satisfaction” of the lien or the lien gets contested. When this occurs a title company has to dig through the records to determine if the lien was done in accordance with the laws of the jurisdiction. Liens must be resolved before the finalization of the sale.
There’s little advice that can be given for avoiding errors in public records simply due to the fact that humans make mistakes. Whether it is the fault of the homeowner, contractor or a public servant, the filing or recording of a record can have lasting impacts on a home’s title that will have to be addressed at some point in the life of the property. Since there’s no way to ensure that other people won’t make errors, a homeowner’s best bet is to get an owner’s policy of title insurance. What this does is protect ownership rights from these types of public record errors. Depending on the terms of your specific insurance agreement, the insurance can cover legal fees associated with resolving these matters, protecting owner interests and losses incurred due to title defects.
Remember, although a property may be new to you, it most likely comes with some history. No one is perfect and title defects do arise from time to time. The best thing you can do is to keep title insurance to avoid the hassle of correcting errors that negatively impact the sale or ownership of your home.