Property owning is one of the most valuable investments nowadays, but there are tons of legal responsibilities along with it.
One of the most important ones is that you need to conduct a property title search often to protect the asset. Most believe that conducting a title search before buying one is their only responsibility. But that’s far from true, especially because it’s needed in refinancing and helps in catching unexpected legal and financial concerns ahead of time.
So, if you’re wondering what a title search is and how often it must be done, let’s get down to it here.
What is a Property Title Search
A property title search is the public records of a respective property about its ownership history, mortgage or loan details, tax records, legal claims, liens, easements, and restrictions.
It helps confirm that there is no unresolved issue that can hamper ownership rights, indicating a clear property title.
A title search is a must for new buyers before real estate investments. But sometimes, even after property acquisition, a title search can help identify issues.
How Often Should Property Owners Conduct a Title Search
Property title search should be conducted during the following key scenarios:
Before Buying a Property
This is the most common time to perform a title search. While purchasing a property, a title search lets you confirm different information, such as whether the seller you’re dealing with is the legal owner with full rights to make the sale, whether the property has unpaid liens and debts, any disputes that can later affect ownership, and if the property can even be legally transferred.
If you don’t undertake a title search before buying a property, you may inherit financial and legal troubles. Some common examples of inherited problems are an unpaid tax lien or a contractor’s claim.
So, you must undertake a title search by yourself or let real estate professionals, title companies, or attorneys handle it.
Every Few Years
This one is for individuals who own a property already and want to be proactive as a precaution. Generally, once you buy a property, the ownership stays stable. But at times, unexpected issues arise. Conducting a title search every few years can help prevent any legal complications that might arise down the road.
However, there is no set frequency for property owners to conduct a title search. But most conduct once every 3-5 years, especially for investment real estate or high-value properties.
Before Refinancing
The next significant time to conduct a title search is before you refinance a mortgage. When you refinance a property, lenders check whether the property title is clear, ensuring no new claims are filed on it since the original loan was sanctioned. The title search before refinancing first verifies whether the property still belongs to you, that no new liens have been added and that there are no ownership disputes.
By checking for a title search before refinancing, moneylenders and property owners are both protected, and the property stays a secure financial asset.
Before Selling a Property
If you’re planning to sell your property, that’s another time to conduct a title search. Do it way before listing the property on the market. This is because if you do so after listing and find problems, issues can appear later and delay the sale, leaving a negative impression on buyers.
For instance, unpaid taxes may get recorded as liens. A contractor might have recorded a mechanic’s lien after renovations. A judgment or legal claim might have been attached to the property. An early action ensures that you can solve issues before any buyer shows their interest in purchasing the property. It prevents delays or cancellations in the closing stage.
After Major Life Events
Particular life events also call for a title search. This can be property inheritance, separation, divorce, property transfers within a family, or removing or adding a co-owner from the title.
In each of these, a title search helps you verify whether the ownership records are updated properly, ensuring further steps take place smoothly without any legal complications.
For inherited properties, a title search helps confirm whether the transfer process was correctly recorded.
Closing Thoughts
Thus, how often you must conduct a title search depends on factors like change in ownership, financial activity and legal risk. Consult a title search expert today to identify the ideal frequency for you!
