Common Title Issues

I could probably bet that you are sitting there wondering, “what could go wrong?” Well, there are numerous title problems that can arise when you are closing on a home, but how can you cover yourself when going through the closing process? So you do not fall victim to a title mishap, you will need to go into the closing with everything you need to know about escrow. By having the knowledge, you can feel protected and well-prepared for any unfortunate circumstance. A good way to be prepared is to have title insurance! Your home may be new to you, but the property can have more history than you may know! A quick title search can help uncover any title issues/defects tied to the property, and these are important to know before stepping into your closing! 

Back-Up Information You Need to Know:

What is a title in real estate? 

A title is a legal document showing ownership. A good comparison to this would be the title to your car, but there are many ways in which you can show ownership of your home: as a single individual, a married couple, or joint tenancy. 

Who handles the title transfer? 

An escrow company usually handles the deed and title transfer during a home sale, and before the transfer happens, the seller is responsible for the title search. This will prove rightful ownership of the property and make any outstanding claims apparent through the process.

Title Search Errors: 

Just so you know, not all searches are made equal, and issues that are unknown can arise. Issues with your title could potentially put you at risk of losing your home. So, understand what all could go wrong before stepping into a closing. 

12 Title Issues:

1. Property Comes with a Lien 
   
   The prior owners of your home may not have been the best at book-keeping or stayed on top of paying their bills. So, what does that mean for you? Well, even though the debt is not your responsibility, banks or other financial institutions can place liens on your property for unpaid debts, even after the sale!

2. Encroachments w/ Neighbors
   
   Encroachments can draw you closer to your neighbors; more than you would like! Encroachments are when the neighbor’s property line overlaps with your own, and this may bring up an issue where property lines are not clearly drawn.

3. Public Records
   
   An issue with public records can cause financial strain on a property’s owners. Sure, everyone makes mistakes, but you don’t want to be paying for other people’s mistakes! Financial strain introduced due to clerical errors (record errors, negligence, or incomplete documentation) can be devastating for a homeowner. Don’t let this happen to you! 

4. Long Lost Members of the Family
   
   Who’s knocking on the door? I guess you were not expecting to meet the previous owner’s family, right? At a time of death, if the owners rightful heirs are nowhere to be found, the property may be sold. Say you bought this property and someone came knocking on your door asking about their property. This may cause problems to rise, so be aware of the title’s history! 

5. Bankruptcy
   
   If the previous owner of the home you just purchased filed for bankruptcy, it can cause a ripple effect that touches all involved. More often than not, people will petition the court and have the home released for sale. Otherwise, the selling/ closing process will be stalled. 

6. Forgeries
   
   We all wish that everyone was as honest as they look, but we unfortunately do not live in a perfect world. Forged and fabricated documents obscuring the rightful owners are filed within the public records and can possibly put the ownership of your home in jeopardy! 

7. Boundary/Survey Disputes
   
   You may have viewed several surveys of your property before purchasing, but other surveys may exist showing differing boundaries. This could create an outcome of your neighbors claiming ownership to a portion of your property.  

8. Undiscovered Will 
   
   When a property owner dies without having anyone on their will, the state may sell their assets, including the home. When you purchase a property like this one, you assume your rights as the owner. However, if a will becomes apparent (even years later), your ownership of this property may be seriously jeopardized. 

All in all, understanding common title mistakes can prepare you for anything! Trust us when we say, it’s better to be overly cautious than not!