Many people have reached the happy spot in which they found their dream home, made an offer that got accepted, and are closing in on becoming new owners. Although this is surely a very exciting moment, before you can call the home your own, there are some steps that need to be taken, including getting an inspection, having an appraisal of the home, and concluding the property title search.
Home appraisals and inspections are pretty common, so many people have heard of them. But when it comes to property title searches, there are less known. This is one of the obscure parts of the whole experience of buying a home.
The title property search is very important to make sure that there are no hiccups when you close on a new home. The homebuying process is an expensive one overall, so nobody wants to pay unnecessary costs. Still, the small fee of a title search can prevent you from losing your home to a title dispute.
How Much Does a Title Search Cost?
The cost of most title searches is anywhere between $100 and $300 for residential properties. This price will vary based on how complicated the search process is and the state in which you’re getting the search. When buying a commercial property, it’s not uncommon for the title search to run closer to or even over $1,000.
The typical title search will take 10 to 14 days and at the end of the process, you should get a simple report on all the documents related to the property, with highlights of any obstacles you might have to face when moving forward with the purchase. This report will be very brief for properties with no issues.
There are other title-related expenses aside from the base cost of the title search. These include a recording fee, title settlement fees, and lender’s or owner’s title insurance. These are part of the buyer’s or seller’s closing costs most of the time.
Who typically pays for the title search?
The responsibility for paying the cost of a title search can vary depending on the real estate customs and agreements in different regions. In some cases, the buyer may cover the expenses, while in others, it may be negotiated for the seller to pay or split the cost. The specifics should be discussed and agreed upon during the negotiation and closing process.
What is a title search?
A property title search is a way of examining public records of a certain property to confirm the legal owner of a property. This process scrutinizes the history of ownership for your future home, which makes it a very important step in the homebuying procedure. The title search will pinpoint defects or issues with the title, as well as any liens or claims on the property that can cancel or stall the process.
Most people assume, and reasonably so, that the person selling a home is actually entitled to do this. However, some people have bad intentions and this isn’t always the case. There are situations where there is a lien on the property due to the current owner owing creditors, or there are properties that have claims on them, like inheritance disputes.
Do I really need a title search?
You will be required by most lenders to get title insurance and title searches as part of mortgage underwriting. Keep in mind that you’re going to put yourself at great risk if you want to skip the title search as a way of expediting the process and you’re buying in cash.
In some situations, current owners aren’t even aware of old claims or liens against the property’s title. The property might have passed hands with improper record keeping in the past or they may have inherited a lien they know nothing about. There have been instances in which there were two owners of a property and only one was delinquent on the property payments, but still, those debts came back to haunt the new buyer.
Who does the title search?
An attorney or a title company will take care of title searches for the buyer in most situations. There are cases in which the lender will be able to handle this for you.
Don’t go for a certain title company before asking for an estimate of the prospective cost. They should be able to offer you a solid estimate as long as you can give them details like the address where the property is located.
You can verify whether the title company has a recognized underwriter as well, who can fund the claim if you are confronted with any issues. Several title agencies choose to underwrite their policies using a major company like Old Republic, Stewart, TRGC, Fidelity, or First American.
Although in most cases this won’t matter a lot, it’s good to know right from the start that you work with a title company that is backed by a major underwriter. This is because the underwriters will be the ones to give you title insurance and they will also pay your claim if you have any issues in the future.
Can I do you do a title search myself?
If you want to avoid the title search fee, you are always entitled to do the search for a title yourself, as all property records are public. But just because you can, shouldn’t mean you should, as it’s always better to leave the legal aspects of buying your home in the hands of professionals. You want to make sure you have someone with a trained eye perusing complicated legal documents, someone with enough experience to know where to look.
If you choose to do this yourself, before you start searching, visit multiple government offices, as all municipalities and counties organize property information differently. Places like county assessor offices, the recorder’s office, and the county courthouse, are some of the best places to start looking for the records.
You will first look for the legal description of the property. You can find this on the property tax statement. Using this information you can then visit the Office of the Examiner of Titles or the Recorder’s Office to ask for access to public records using this legal description. This process can usually be done online as well. You will then have to do the heavy lifting and look through property records to see any liens and the current title holder.
Frequently Asked Questions
Is it worth paying for a property title search?
Cutting corners is a really bad idea as it can lead to problems for both the seller and the buyer, which is why buying a home will take effort, money, and time. The usual title search will cost less than $250, which isn’t a lot considering the potential thousands of dollars you can save in legal fees and debts if you face issues in the future.
How long does a title search take?
The efficiency of the attorney or title company as well as the complexity of the property will dictate the duration of a title search. The usual title service will take between 1 and 2 weeks to complete.
What is included in a title search?
The average property title search services include a review of easements, liens, mortgages, deeds, and public records, as well as any other relevant documents needed to establish the ownership history of the property and any issues that could affect the title.