What Is a Property Title Search & How It Works?

Michelle Wilson - December 9, 2023

When purchasing a new property, the stress of completing the necessary steps to close may seem overwhelming. Typically, individuals must submit an offer, close the purchase, establish a profile for the lender’s paperwork, and finalize any legalities. A few of these steps may seem tiresome and repetitive, but they’re in place to protect your most significant investment.

The inspection, appraisal, and property title search are critical steps in the home-buying process. A property title search carefully reviews all public records to determine the property’s legal owner. This search also determines any claims on the property, including liens, which may influence the purchase.

Why Would Someone Need a Title Search?

A title search allows full disclosure of the property history, including a complete list of claims against the property title. It’s commonly the first step in the home-buying process. This tactic protects new buyers from previous issues against the property, including outstanding debts.
Common conditions against a property may include easements, restrictive covenants, new mortgage liens, or debts. These conditions are affixed to specific properties and not attached to the owner.

Additional surprises when purchasing a new home may include previous bills from prior owners, homeowner association fees, or unpaid taxes on the property. For many mortgage underwriters, the property title search is mandatory before finalizing the purchase.

How Does a Title Search Identify Who Owns the Property?

A title search will review all publicly available records for ownership history. Typically, a title company or attorney will use legal documents to unravel the chain of title, confirming the individual selling the property is rightfully able to do so. Further, the title search will always include any legal claims or financial obligations on the property.

Understanding the Title Search Process

An abstractor is anyone conducting a title search on a property. The abstractor will review public records and determine all relevant information. Likewise, they will also collect any legal documents on the property. Information found within the database is compiled into an abstract, including a recorded chronology of documents.

What’s Included in the Title Search Abstract?

The title search abstract will include current and all previous owners connected to the property. The document shows any previous surveys, relevant wills, lawsuits, or easements that cross the property.

What Do the Title Search Results Mean?

The title search will uncover any financial issues against the property title that could impact you. If there are outstanding claims against the property, they may pose issues for new homeowners. For instance, purchasing a home with an outstanding lien against the house could prove problematic during the buying process. Holding a free and clear ownership of the investment is critical.

How Long Does a Title Search Take?

Unfortunately, there isn’t a set standard for title search turnaround times. The results will largely depend on the complexity of the documents surrounding the property. Every title search uses multiple sources to gather the information, which could delay the process if an office is slow.

Once the agent receives the details, unpacking the information may take several hours or weeks. Expect the title search to take one to two weeks to finalize.

Who Performs the Title Search on a Property?

An attorney or title company will take care of the search process. A few situations may include the lender or home buyer taking over this process instead. If you’d like to take over the title search, you’ll need to find records from the county assessor’s office, the recorder’s office, and the county courthouse.

Although saving money by running a title search may seem like a good idea, it may be better to let professionals handle this portion of the buying process. Often, legal documents can prove confusing for the average home buyer, increasing the probability of something essential being overlooked.

Can You Minimize the Risk of a Claim?

Yes. Anyone buying a new property can purchase title insurance or a title warranty. This product protects the ownership claim. The title insurance is a one-time purchase to protect new owners but can prove costly. Title insurance is commonly 0.5-1.0% of the total purchase price. Your agent will include these expenses in the closing costs.

What is Title Insurance?

Title insurance protects buyers from financial loss if title-related issues arise during or after the sale. Title insurance includes liens, defects, or encumbrances in the actual ownership of a property or title ownership. While typical insurance will protect against future events, title insurance protects against claims for past occurrences.

Is There a Difference Between Old Homes and New Builds?

A new home is more likely to hold fewer documents, which can produce faster results on the title search. Alternatively, an older home is more likely to contain more documents, slowing the process. Although waiting for a title search is frustrating, rushing the process increases the likelihood of an issue occurring in the future.

What Happens If the Title Search Has Problems?

If your title search shows potential issues or problems, the prospective buyer can point them out to the seller. After seeing the title search, the buyer will need to determine whether they’d like to continue with the property purchase. Buyers should always include the real estate agent and attorney in the title discussions. Sellers can quickly fix a few issues, while others take so long they jeopardize the loan commitment.

Clean Title Versus Dirty Title

The title search will confirm a property’s legal ownership while identifying potential claims on the property. A clean title indicates sole ownership of a piece of land or property, while a dirty title suggests a cloud of uncertainty or discredit. Unresolved building code violations, unknown liens, and erroneous surveys are examples of defective or dirty title designation. A simple misspelled or misapplied document could also cause issues for new owners.

How Much Does a Title Search Cost?

The title search cost will vary according to state, but expenses will range between $75-$200. When ordering the title search, it’s always a good idea to ask for an estimate. The title search should include an easy-to-understand report connecting all reports on the property. The details should also highlight any issues that could prove problematic when moving forward with the purchase.

While individuals can perform the title search independently, the potential legal issue isn’t worth the cost of the professional search. Holding a title search free of any outstanding claims is critical in the buying process. As such, it’s wise to leave this portion of the home-buying process to the

professionals.

Conclusion

A title search will examine all public records to determine a property’s legal ownership. These searches use many sources, including tax liens, land records, court judgments, and deeds. Although homeowners can complete the process independently, it’s often best left to professionals experienced in legal jargon.