It’s important to know exactly what you’re buying when making a major purchase, and buying a home is no exception. A title search is an important part of the homebuying process because it ensures the seller can legally transfer the home to you free and clear.
“Completing a thorough title search is critical to ensuring a smooth transfer of the property from the seller to the buyer,” says Jo-Ann M. Marzullo, a real estate attorney at Ligris + Associates in Newton, Massachusetts. “The title search confirms that the seller legally owns the property, and thus is able to transfer the title to the new owner.”
Here’s a detailed rundown of everything that’s included in a home title search.
What Is Included in a Title Search?
A property title search will document in full every recorded instance of the home changing hands from one owner to the next. This is called the chain of title.
A title search on property also will uncover any encumbrances, such as liens, easements, and restrictive covenants. You may be surprised to find that people who don’t own the home have certain rights to it, and a home title search is the best way to learn about them before you finalize the sale.
While specifics vary by jurisdiction, the title search typically will include:
- Vesting title. This describes who has ownership, such as a married couple versus a single person, and determines who can sign documents related to ownership of the property.
- Property description. This includes the exact size and location of the property.
- Muniments of title. This includes wills, court rulings, and purchase and sale agreements that prove the title belongs to the current owner.
- Encumbrances. These are claims on a property from someone other than the owner, and typically place some legal restrictions on how the property can be used. Examples include zoning laws, covenants, liens, and easements.
- Easements. An easement refers to the legal right of someone other than the owner to enter or use the property. An example would be an easement that lets utility companies enter the property to trim trees near power lines.
- Mortgages and assignments. This includes any mortgages on the home, as well as which lender or investor currently owns that loan.
- Property tax information. This details the home’s property tax obligations, including any unpaid or delinquent taxes.
The Bundle of Rights
A title is made up of many rights. This bundle of rights could all be legally given to you or be split among multiple people. Another way of looking at what is included in a property title search is assurance that when you buy a home, you’ll receive the full bundle of rights.
Though specifics may vary by state, the bundle of rights in the title search report typically will include:
- Right of possession. This is the right to own the home.
- Right of control. This allows you to decide how to use the property. It typically is limited by zoning laws and homeowners associations.
- Right of disposition. This is the right to sell the home. Liens or other title problems may limit it.
- Right of exclusion. This allows you to decide who can enter your property. It may be limited by an encumbrance.
Who Does a Title Search?
A title company will have a title searcher complete your house title search. A real estate attorney also can conduct a title search.
Can You Do Your Own Title Search?
While you can consult the public record yourself, it’s a complicated process. A title company or attorney will have the experience and know-how to locate and thoroughly review the relevant documents.
“Title searches are a complicated and arduous process,” Marzullo says. “It is essential to select a seasoned local real estate attorney to perform your title search. Their attention to detail and dedication to the process will greatly alleviate potential stress during the homebuying process.”
Problems With the Title Search
What’s included in a title search is all the issues that could affect a smooth transfer of ownership. Defects in the chain of title, liens on the property, or surprise legal disputes all may spell bad news for a sale if they aren’t corrected.
Conducting a title search will alert you to any problems before you close the sale. Buying owners title insurance would protect you from financial losses if title problems are missed in the title search and come to light after the sale has closed.