Lenders will require a title search when giving you a mortgage, and the title must be clean for a real estate transaction to move forward. But are they always necessary?
- A title search is necessary before a lender approves a mortgage
- You need a title search to avoid unnecessary legal disputes over your new property
- A title search enables you to enjoy peaceful property purchase and use
- A real estate attorney can help you resolve some of the issues a title search reveals
- You need a skilled real estate attorney to perform a title search
Do you intend to buy a new property in Florida either on loan or cash? Congratulations on the worthwhile move and investment decision! But no matter how noble your intentions are, one thing could stand in the way of enjoying your new purchase — the title. Good investment acumen requires you to perform due diligence to ensure that the property's title is clean.
Therefore, a title search becomes mandatory for securing a mortgage and proceeding with the transaction peacefully. But is a title search essential, and if it is, what are its benefits? Here's what you need to know about title search requirements and risks in Florida.
What is a title search and why is it important?
Let's start by defining a title search: A title search is a process in which a title search attorney or company searches public records to establish who owns a given property, its current ownership status, and if it has any liens, judgments, or encumbrances against it.
This search process allows a potential buyer to know the above facts before proceeding with a real estate transaction. It also lets a lender know the property's ownership status before mortgage approval. A thorough title search can unearth critical statuses that even the current owner may not know. For example, the home might have a previous claim against its title. The search will also protect you against any property's former owner's debts — because you buying the property doesn't eliminate those obligations.
Be sure you engage the right company to conduct a title search. Otherwise, you might inherit unpaid property taxes, home improvement bills, or homeowner's association fees. A title search should reveal the following facts about a home you intend to buy:
- Outstanding liens
- Its current owner
- Its ownership and title history
- The property's legal description
- Mortgage details, assignments, and modifications
- Any existing encumbrances
- Existing restrictions or easements
- Outstanding property tax details
So, what should you do if the search reveals any of the red alerts above? You have three possible options, depending on your purchase contract's provisions:
- Request that the seller resolve the issues before buying the home.
- Request that the seller compensates you for the cost of fixing the issues.
- Cancel the transaction and get a refund of your deposit if you made one.
The title search process
A real estate attorney or title company performs a title search for potential property buyers. Mostly, a lender or other interested party seeking to verify a home's ownership initiates the title search process. A lender may initiate it before approving a loan or other credit that uses a given property as collateral.
Sometimes potential property buyers may conduct title searches independently. Self-search isn't the best option because legal documents can confuse the average person. Additionally, accessing courthouse records can be a difficult task and process. It's beneficial to let dedicated professionals do it for you.
A search professional reviews public documents in the county clerk's office, recorder's office, local courtroom, registry of deeds, and other county offices. The title search professional also visits various locations to verify all the necessary facts before a transaction happens.
Please note that the title search process might slightly vary based on which county the search is done in. Some records might record details like the deed, real estate contracts, the owner's name, and property location. Digging through these documents and databases is tiring and lengthy, making it necessary to leave the process to dedicated professionals.
How long does a title search take?
Although the title search process is tedious and lengthy, its actual duration depends upon various factors:
- Document complexity: A search duration significantly depends on the complexity of the documents relating to the property under search. A title search expert visits different county offices to perform the process. Some offices provide records faster, while others might delay their responses.
- Data amount: The amount of data a title company reviewer receives determines how long they need to pore over the documents. Thus, they can take a few hours or weeks to complete their examination before presenting their findings to a client.
- Property age: A house's age also determines how long a title search takes. A newer home has fewer documents to examine, shortening the process. Inversely, an older house has more records that require more time to examine, lengthening the process.
So, it pays to be patient while a title search company does its job. Don't rush the examiners because allowing them enough time to do their job saves you avoidable long-term problems.
Once the title search professional has finished their job, what's next? The title expert will give you a preliminary title report. They will tell you what the report means and show you if any red flags exist. Based on the issues the title examiner points out and their magnitude, you will be in a better position to respond appropriately. You can take any of the three steps we saw earlier under title search definition and importance.
It's also vital to include your attorney and real estate agent before responding to any emerging issue. They're more qualified to advise you because they handle similar challenges frequently. The reason is that some title problems a search detects are easy to resolve with professional guidance. However, other red alerts might take too long to fix and could undermine your loan commitment.
Get the help you need for a title search in Florida
A clean title is indispensable when purchasing a property without unnecessary legal battles. A clean title is a mandatory requirement for lenders before approving mortgages, so performing a title search is an invaluable necessity.
Thankfully, you can save yourself all the potential headaches accompanying a tainted title by performing a title search. Consulting and hiring an experienced real estate firm like PeytonBolin helps you purchase and enjoy your home with peace of mind.
Do you want to get the best out of your next property purchase? Don't hesitate to contact our office today to enjoy excellent, timely, and affordable title search services.