As part of the lending process, a title search is typically required as well as a title insurance policy. This is done to protect buyers and lenders from anything that could prevent the titleholder from selling the property. Here are some of the things that can create title issues:
- Unpaid property taxes.
- Liens or encumbrances.
- An incorrect legal description of the property.
- Building code violations or incorrect surveys.
- An unrecorded satisfaction of a mortgage.
Most clouds on a property’s title can be corrected, but the transaction cannot be completed until these items are eliminated. Most real estate contracts contain a clause that requires the seller to convey marketable title to the buyer at the time of closing, so it is the seller’s responsibility to correct any defects on the title.
Clearing title issues can be a complicated process so, if any are present, you may want to consider retaining a real estate attorney.
