How to Read a Title Search Report

Get in the Know About Title Search Reports

When you find an investment property that you want to purchase, an essential step is understanding the ownership history. That’s where a title search comes into play. A title search report gives you a look into the legal records associated with that property. 

Before we get into what a title search report contains, let’s go over the fundamentals.

What is a Title Search Report?

A title search report verifies an investment property’s ownership history. It also reveals any easements, financial or legal claims that may exist.

Why is a Title Search Report needed?

Without a title search report, someone else could claim ownership of your property, or you may have a lien that suddenly becomes your responsibility. 

Imagine that you buy a home from a seller, you close the deal, and you move in – and then another person notifies you that they have a documented claim to the property. Or you discover there are unpaid homeowners association fees or back taxes that suddenly become your responsibility.

That’s why title search reports are critical. If another person or organization has a claim, your title search report should reveal that information.

Liens Against Property

A lien is a legal claim associated with the property from a creditor. A creditor can be a moneylender, government organization, or even a contractor. In general, a lien is a way for an organization to ensure payment.

Property Taxes

Government organizations can have a lien for any outstanding property taxes. Again, if you become the property owner, unaware of this existing obligation, it then becomes something you have to handle. Or, the government agency may seize your home and sell it for repayment of the back property taxes.

Mortgage Liens

Most people who are homeowners have a mortgage loan. That means your bank or credit agency has a lien on the property to help ensure repayment of the loan. Once you pay off your mortgage, the lien is removed. 

Mechanic’s Liens

A mechanic’s lien is used when a contractor or construction company isn’t paid for agreed-upon services. If you have a contractor put an addition on your home, for example, and you don’t pay the contractor, then they can file a lien against the property for rightful payment.

Income Taxes

If you don’t pay income taxes to federal, state, or local governments, a lien can be filled by those agencies for repayment. 

Easements in Title Report

An easement is another party’s right to use part of your property at their discretion without your approval. Easements aren’t bad per se, but it’s important to know who can access your property. 

Utility companies have an easement to most properties, so they can access utility lines to ensure service. That’s not a bad thing, but imagine if someone had the right to graze their cattle in the field next to your house, and you didn’t know it.

Mattingly Ford Title

Mattingly Ford Title Service conducts thorough records verification to uncover the entire transaction history associated with a property. Our goal is to make sure your closing goes as smoothly as possible, and nothing comes up down the road that presents an issue.

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