Property title search: How does it work?

Buying a house is an exciting milestone for home shoppers. But it requires several legal steps, from making an offer to signing legal documents at a closing table, before you can officially become a homeowner. Each step is crucial to protect your future investment.

One critical measure is to have a property/home title search conducted to ensure the absence of any contested claims on who owns the property.

We’ll take a closer look at what’s involved in a title search, why you need one, what the process involves, how long a search for title takes, and what it will likely cost.

What is a title search?

When buying a home, it’s natural to assume that the seller is entitled to sell the property. That assumption can go awry if someone else has attached a claim or lien on the property. This can be a serious problem with the title.

To avoid these risks, a property title search is needed. This search examines public records to establish a property’s chain of title, identify any title defects or encumbrances, and confirm a property’s rightful, legal owner. A title search should also reveal any claims, liens, easements, judgments, or restrictive covenants against a property that may affect purchasing it.

Typically, this involves checking online sources for these documents or visiting a courthouse to review the paper documents if no online resources are available.

Title search vs. title insurance

A title search is the investigative process of reviewing records to uncover issues. But title insurance is different.

Purchasing title insurance is optional for home buyers, but it is strongly recommended to safeguard your property interest in case future claims against your ownership arise from disputes over the seller’s right to dispose of the property or undiscovered outstanding liens.

If you are financing a home with a mortgage lender, your lender will require that you purchase a lender’s policy on their behalf.

An owner’s title policy shields you against any encumbrance that limits your property rights, along with paperwork mistakes and outright fraud by the original seller. You’ll be covered if liens from before the sale are discovered, if issues stemming from incorrect public records surface, if you need to be defended in court in cases of fraud or forgery by the seller, or if you need to be compensated if an undisclosed easement or similar agreement limits your usage or decreases the value of your property.

A lender’s title policy safeguards the lender, covering losses stemming from liens, title defects, or claims of ownership that weren’t uncovered during the initial title search. The lender’s policy usually remains intact for the duration of the mortgage.

Why do I need a title search?

Finding out who owns the property you want to purchase is just the first step. The current owner may not even be aware of an old claim on the property’s title. A previous owner’s debts can become your responsibility because mortgage liens and similar debts – as well as easements and restrictive covenants – follow the property, not the owner.

Without a title search, you could be responsible for a past owner’s debt, be limited in what you can do to your property if there’s an easement or restrictive covenant or even owe unpaid property taxes or HOA fees. A title search provides an opportunity to clear up these and other issues. That’s why mortgage lenders require a title search and title insurance as part of the mortgage underwriting process.

“Without reviewing the title, you have no idea what you are buying or even if the person selling the property is the true owner,” says Chuck Biskobing, a closing attorney with Cook & James, a real estate closing firm.

What does the title search process involve?

What exactly is involved with a title search? First, be aware that it’s the title company or attorney you hire that conducts the search; the search itself shouldn’t be conducted by you, the buyer, personally.

Here’s a breakdown of the steps you can expect with this mostly behind-the-scenes process.

Order the title search

First, you need to notify a title company, closing attorney, or title abstractor that you want to run a title search on a particular property. This is typically initiated after you sign the purchase agreement. Expect to provide details about the property and seller.

Review the property’s public records

Next, public records related to the property are carefully reviewed. These include, but are not limited to, deeds, mortgages, tax records, court judgments, and other encumbrances such as easements. The title searcher can typically access these records by checking online county tax portals or visiting county recorder or clerk offices or local government buildings; an in-person visit may be necessary to access physical deeds and historical archives.

The searcher is on the lookout for things like clerical errors, ownership disputes, outstanding liens, and property use restrictions. And they may need to check for records earlier than those associated with the current owner selling the property. These documents may be different when buying an older house vs. a newer house because an older house may have had more owners over a longer period. So, there may be more documents to review.

Establish the chain of title

A chain of title serves as the chronological paper trail history of a property that tracks every official transfer of ownership – from the very first owner to the current one. The chain of title is established by using the records and information gathered.

The searcher will also look carefully for continuity, as gaps may indicate fraud or other issues, such as missing heirs.

The primary evidence used to establish a chain of title is an abstract of title. This is a condensed chronological history of the ownership of the property that enables the searcher to validate a continuous line of ownership and identify any unresolved issues that must be cleared up before a valid transfer can proceed. The abstract of title should detail every recorded deed, lien, mortgage, and legal proceeding related to this parcel of land.

Report and resolve issues

Any property rights issues that the searcher finds will be presented in a preliminary title report. These problems will need to be resolved before the real estate transaction can proceed.

You can work with the seller to resolve title issues discovered before closing. You may need to get the seller to address unpaid debts, file documents to correct errors, and take steps to resolve ownership disputes with heirs.

If any of these issues can’t be resolved, you have the option of walking away from the deal, which is recommended. If the issues are handled, consider purchasing an owner’s title insurance policy.

How long does a title search take?

The speed of a title search will vary based on the complexity of the documents associated with a property, but a title search often takes about 2 weeks to complete.

A title search will involve obtaining records from multiple sources, which can delay the process if an office takes a long time to respond. If you need to get documents from multiple sources or run a title search on an older home with many associated documents, the process can also be protracted. Remember that, while a longer title search can be inconvenient, the thoroughness required is to your benefit as a buyer.

Once the documents are in the hands of the title company examiner or attorney, it may take a few hours or weeks to review all the paperwork and uncover any outstanding claims.

How much does a title search cost?

The cost of a title search can vary depending on several different factors, often priced as low as $100 to $250 but can cost as much as $300 or more in a complex case.

This expense will be included in the “title fees” portion of your closing costs, along with your owner’s title insurance and other related costs. To save money, consider shopping around for a title search company.

At the end of the investigation, you should receive an easy-to-follow report on the documents connected to the property. You should also have access to highlights of any encumbrances you’ll need to resolve before moving on with the purchase.

Though you can do it yourself, it may be best to leave a title search to the professionals and simply budget for the cost of title fees.

FAQ

Still have questions about title searches? Let’s dig a bit deeper.

Do title search requirements vary by state?

Yes, title search practices and requirements can vary by state, particularly if attorneys or title companies handle the process and based on how records are maintained. While the core objective remains the same, the procedural details and regulatory oversight can differ meaningfully across jurisdictions.

Do I need a title search if I’m paying cash?

A title search is a good idea, even if you are paying with cash. Conducting one will ensure there are no legal issues associated with the property. Without a title search, you could inherit hidden liens or ownership disputes that become costly headaches down the road.

Can I conduct my own title search?

You can perform a basic title search yourself by examining public records. But this is not recommended for buyers because the title search process is complicated and the documents may contain legal nuances that are difficult to interpret. Trained and experienced experts can spot small nuances that a typical person without property record experience can overlook.

What issues will a title search not reveal?

A title search is not guaranteed to reveal all problems that are not documented in public records – including undisclosed heirs, fraud, and some boundary disputes. That’s why it’s strongly recommended to purchase title insurance, which protects from risks that are difficult or impossible to detect in the search process.

Can I get the seller to pay for the title search?

Who pays for the title search is negotiable and often dictated by local market customs and terms in the purchase agreement. It’s normal in some markets for the seller to pay some of the costs related to title, while in other states the buyer typically pays these fees.

The bottom line: Title search results can impact a buyer’s plan

A title search is a key part of the homebuying process. If you know how a property title search works when the time comes to get one, you can correctly interpret the results of the search and know how to best proceed based on those results.

If you’re ready to buy a home, you can start the process by getting preapproved for a loan with Rocket Mortgage.