Six Things to Know About Property Titles
A property title is a legal document that states the specifics of a property and is often in the form of a deed. Because property titles are so important, it is vital to complete a title search prior to closing on the home. However, many first-time homebuyers know little to nothing about this process. A title search seeks to ensure that there are no unexpected surprises that will limit your ability to fully own or renovate your new home. Though most real estate transactions are completed with no issues, if your property does have a title issue, you may have to deal with major problems that are not easily resolved. Below are six important things to know about property titles.
Purchasing Title Insurance
One of the first things you will do after officially purchasing your home is to buy title insurance. There are two kinds of title insurance policies:
- Owner’s title insurance – protects the buyer
- Lender’s title insurance – protects the lender
Owner’s title insurance gives protection equal to the price you are paying for the property. This insurance gives the buyer protection if a problem is discovered after the title search is completed.
Though you will have almost no involvement in resolving a title search issue—or the resolution—understanding how this process works can give you piece of mind.
Prior Claim to the Title
A title investigation checks any prior claims that may affect your purchase on the property. The search focuses on public and other land records that go back many years. While not commonly known, almost one-third of title searches uncover some issue. The most common issues found include:
- Previous owner failed to pay state or local taxes
- A contractor was not paid for work completed
- Mistakes or omissions in deeds
- Undisclosed owners, heirs or conflicting wills
Resolving Issues with the Title
If there is a problem with the property title, yet both parties want to continue with the transaction, any and all parties involved in the deal must sign closing documents. However, the seller is responsible for resolving these issues such as outstanding judgements or delinquent taxes.
The property title search will also check for easements, restrictions, and right-of-way that may limit your use of the property.
What to Do with a Title
Once you are the owner of your new home, place your title in a safe place, such as a safe deposit box at the bank.
What Happens to the Title When you Sell
When you sell your home, the title ownership will transfer to the buyer. Further, the buyer of your home will receive the title a few weeks after closing. This official transfer indicates that the buyer now owns the property, and you no longer have any claim to the home. Finally, once the buyer receives the title to the home, the physical title you now have is invalid.
What to Do If You Lose Your Title
If you lose your title you do not have to panic. If you lose your title, you can go to your local clerk’s office at the county courthouse and request a copy. However, if you have a mortgage, your mortgage broker should have a copy.
Contact Our DC Law Office for More Information
Finally, for more information on six things to know about property titles, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog