There’s a lot more to buying a home than falling in love with how a home looks. It takes a lot of legal research to make sure you’re making a purchase that won’t come back and bite you. That legal research is generally in the form of a title search, researching the home’s chain of ownership (amongst many other things). You certainly wouldn’t want to buy a home that someone could potentially make a claim on down the road.
Don’t let your home purchase haunt you – obtain a title search before you buy a home. Here are several ways that a title search will protect you, your family, and your purchase.
Title Searches Show Potential Owner Issues
Non-executed or contested wills, unclaimed heirs, or divorce issues could muddy up the home’s ownership. This means that someone may come forward down the road and make a claim against the property. This leads to complicated court processes, legal battles, and financial strain.
Conducting a title search turns out any potential claims and paying for title insurance (part of your closing costs) protects you against any potential claims.
Title Searches Show Liens
Lenders, government agencies, creditors and anyone else that may have filed a suit against prior owners may have liens attached to the property. A lien means the lienholder has a claim on the property. Liens attach to the property – not just the owner. If a lien isn’t released, guess whose responsibility it becomes? Yes, it’s your responsibility if you are the new owner. Talk about haunting.
Mortgage liens are typical to find on a title. They will usually get satisfied when the property is sold, and the prior owner pays off the mortgage. If there are other liens on the property though they must also be addressed before you close on the home. “Released” doesn’t just mean paid off. Sometimes owners pay the debt but don’t get the lien released. A release is a legal document that gets filed on the property to show the world proof that the lien is released of record.
What About Title Insurance?
Let’s face it, not everyone is honest, and people make mistakes too. It’s’ possible that all of the information provided on a home’s history isn’t accurate. Data could be missing or incorrect – even with the best title search! However, with a properly executed title search, you can and should also purchase title insurance. Your lender will require lender’s insurance – it protects their interest in the property from claims or issues down the road. You can also buy owner’s title insurance. With a one-time premium, you have coverage for as long as you own the home.
If a claim were to come up down the road, you and your lender would be protected. You’ll have legal protection and financial security should any potential claim go to court.
Buying a home is likely one of the biggest investments you’ll make in your lifetime. Without the peace of mind of a clear title, you may never know if you’re making a solid investment or not. Don’t take a chance – don’t skip this critical step.
This information, based on New York law, was provided courtesy of The Law Office of Christopher J. Arrigali, P.C. It is intended to inform, not to advise. No one should try to interpret or apply any law without the assistance of legal counsel. Please click here for the full disclaimer.
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