The state maintains property ownership records at the county level to protect individual owners and hold people accountable for maintenance and tax purposes. The records maintained by the county show the legal description of a specific property and the chain of title history.
The chain of title for a piece of real estate shows who has owned the property and for how long. Title records reduce the likelihood of fraud during a real estate transaction. They also allow lenders and creditors an opportunity to compel repayment on significant debts.
When you want to sell your property or refinance it, a title search is usually part of that process. Any transaction with financing will typically require a title policy that protects the lender. During a purchase, you also will want a title policy that protects you.
Before a title insurance company will underwrite a policy for property, they will look closely at the title records. What kind of issues might they find that could delay or even cancel your upcoming transaction?
Old liens
Did you refinance your mortgage, but now the old loan and your current loan both show up in county records? Did you have a new roof put on, and the contractor obtained a mechanic’s lien because you had to wait for insurance reimbursement to pay them?
Sometimes, lenders or creditors will leave a lien on a property’s records even after they have received full payment. Those old liens will have to come off of the record before you can refinance or sell the property.
Inaccurate owner records
Maybe you recently got divorced and executed a deed that removed your ex from title. You also refinance the property so the mortgage is only in your name. However, the recent title search shows that your spouse is still an owner.
If there are old owners still showing up on record or if someone has executed a fraudulent deed to try to lay claim to the property, you may have to go to court to address those issues or execute and rerecord deeds to update the vesting information for the property.
Learning about title issues that can complicate or delay residential real estate transactions can help you prevent or properly handle these issues.