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The Role of the Title Search in the Title Insurance Process

title agent speaking with clients after a title search

A title search is the process of determining ownership status for a particular piece of property. It aims to identify whether the property has a clear title or if there are any encumbrances, such as liens or defects, including errors in public records, which might hinder its transfer between parties. A title search conducted by a title company or an attorney representing a potential buyer helps to alleviate future problems. A title search may also be initiated by a lender or another entity seeking to verify property ownership to assess potential claims or judgments against the property. The investigation is typically required as a condition of approving a loan or extending credit that would use the property as collateral.

A title searcher conducts research using  public records. The goal is to identify crucial information, including the vested owner, existing liens or judgments on the property, outstanding loans secured by the property, and the existence of easements and rights of way. While it is possible for a prospective buyer or an individual to perform a title search independently, it is generally not advisable. The search process can be intricate and the information required is not always easily discovered.

6 Steps of a Full Title Search

When securing a mortgage for a home purchase, your lender will likely mandate a property title search, a crucial step to ensure the property's ownership history is clear of any unacceptable encumbrances. This task is usually entrusted to a professional service provider known as an abstractor, whose fee is typically included in  your closing costs. Considering the substantial investment in a home and the potential risks associated with undisclosed title defects, relying on experts for this task is often prudent.

Nevertheless, conducting a property title search isn't exclusively reserved for professionals since it's based on public records. Here's a guide on how to proceed:

  1. Identify Record Keeping Authority and Online Accessibility - Determine the municipal body responsible for property records, typically the county government, although sometimes managed by the state, city, or town. Check if records are available online, as many municipalities have transitioned to digital formats, making older records accessible. If the records are not available online, then you must visit the repository in person.

  2. Locate the Latest Title Deed - Begin by searching for the property's most recent title deed, typically under the current owner's name. If the property is held by a trust or corporation, utilize the full legal name of the entity for the search.

  3. Review the Title Deed - Pay close attention to the date, grantor (the seller transferring the deed), grantee (the current owner), and any mention of easements or liens attached to the title. Deed documents lack standardization in formatting, requiring some effort to decipher. The grantor and grantee are usually identified in the opening section, with signatures at the document's end.

  4. Examine Court and Tax Records - Look for any court judgments or tax liens affecting the property under the current owner's name. Obtain copies of relevant documents.

  5. Repeat the Process - Search for the grantor named in the previous deed, this time as the grantee in another deed. Note dates, grantors, easements, and liens, and check for any associated court or tax records.

  6. Trace Back to the Original Owner - Trace the property's ownership history back to its initial owner. Any inconsistencies or gaps in the record may indicate potential complications, warranting consultation with a professional abstractor well-versed in local record-keeping practices to fill in missing information.

Title Insurance for Protection

The decision to purchase a property is a significant one, and even meticulous professionals may overlook crucial details. Issues such as overlooked paperwork, concealed claims, or ownership disputes can emerge later, leading to substantial financial headaches, which is where title insurance plays a crucial role, serving as a protective shield for both the buyer and the lender.

Consider discovering an unpaid tax lien or an unrecorded easement after acquiring your dream home. Title insurance safeguards against financial losses resulting from problems related to the property's ownership or title. It functions as insurance for the past, shielding against claims rooted in historical events.

A standard owner's policy typically covers the following:

  • Surprise owners - Protection against claims of another rightful owner emerging after purchasing the property.

  • Forgery fears - Assurance against concerns about fake signatures or fraudulent documents impacting ownership.

  • Record-keeping errors - Safeguarding against clerical mistakes and flawed records for which the buyer should not be held accountable.

  • Hidden restrictions - Detection of unforeseen limitations like easements that could affect property value and enjoyment, preventing surprises down the line.

  • Unpaid debts and legal claims - Shielding against the nightmare of dealing with outstanding liens, judgments, or lawsuits attached to the property.

While the journey of buying a property is undoubtedly exciting, unexpected challenges may arise. Title insurance provides peace of mind, protecting you from costly surprises related to the property's history and ownership. It represents an investment in your future security and enjoyment of your new home.

Conestoga Title Insurance Can Help

For over 50 years, Conestoga Title Insurance Co. has firmly established itself as a highly esteemed figure in title insurance. Recognized for its steadfast commitment to providing reliable title insurance services to the real estate, legal, and financial industries, Conestoga Title stands as a reliable and respected entity. The cornerstone of its achievements lies in its dedication to building robust relationships through exceptional service, extensive expertise, and a strong sense of financial security. Explore the frequently asked questions on our information page or contact us at 800-732-3555 for further details about how to obtain proper title insurance.

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