If you’re like most real estate investors, you already know that a title search is an important part of any property transaction – but what, exactly, should you be concerned about in a title search?
What Should You Worry About in a Title Search?
When you work with a title insurance agency, they’ll typically conduct the entire title search for you.
Title problems can affect your ownership of the property. If someone has a claim against a property, even if you’ve already purchased it and didn’t know anyone else had a claim, they could file paperwork that takes away your right to own it.
It’s important that you know a title search can turn up a number of different issues, such as:
- Errors in public records. Clerical errors can affect the deed to your property, and you could be responsible for paying to correct them.
- Unknown liens. Despite the fact that a lender could put a lien on a property prior to your ownership – and despite the fact that the debt has nothing to do with you – you could end up being responsible for clearing up the debt when the property is in your name.
- Missing heirs. When heirs can’t be found to claim a property, or when heirs disagree and don’t resolve their disagreements until after you’ve bought a property, you could be forced to forfeit ownership.
- In some cases, forged documents could affect your ownership of the property; when the rightful owner discovers what’s been done, he or she may contest your rights to the property… even if it’s paid for.
- Survey or boundary issues. Not all surveys are perfect, and if there are two that show differing results, a neighbor or other nearby owner may make a claim against property you’ve bought.
Title Searches: Absolutely Necessary With Investment Properties
It’s clear that title searches are absolutely necessary with investment properties. A clear title is definitely what you want, because title problems could allow others to claim ownership to the property you purchased.
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