We went to the title insurance agency, Riverside Abstract and interviewed some of their attorneys to find out what the title search process involves.
Public Records SearchA thorough in-depth title search usually includes a meticulous analysis of public records. This can be difficult because, depending on the jurisdiction, liens and assessments against a property can be recorded in several ways - by the name of the buyer, the owner, the address, lot number, etc. Many title companies have now created large databases that catalog consistently to facilitate title studies. These "plants of titles" or storage of public data, organized in a uniform way, help to finish the title search more quickly and with greater accuracy.
Results of the Studies
However, the title search discovers more than just assessments and opinions. From Riverside Abstract we find out that an in-depth search includes information on mortgages, street and sewer appraisals, taxes and tax collections, and numerous other issues that may contaminate a transaction.
A Riverside attorney gave as an example: the person carrying out the search can examine a property and not find opinions or encumbrances, but may discover special construction restrictions that the buyer was not aware of. It may also reveal previously established easements, for example for sewers or power. Another thing that can be discovered is if some part of the property invades the neighboring land. According to the Riverside attorney, this may be a warning that future issues related to property rights could arise. (For more information about this, read this article).
The study of the title can take time, even in cases of new constructions. Another important thing pointed out by Riverside is that, while the structure itself may be new, its terrain, most likely has changed hands numerous times before construction, suggesting the possibility of property rights problems later on. When it comes to a new construction, there is no guarantee that subcontractors and suppliers have not placed liens on the property for unpaid debts.
Behind the Scenes
Buyers rarely see the legwork behind the issuing of the title insurance policy. Title professionals work to eliminate any "imperfection" (rulings, easements, liens, etc.) before issuing the policy, so as to reduce the financial risk by securing the title. When there is an imperfection that is difficult to clear or important enough to inhibit the transaction process, the title company will indicate this to the prospective buyer.
To sum up
“The information collected through the title search will not only give the buyer peace of mind with the purchase, but also will reduce the risk of title problems that may arise in the future. This makes the title insurance policy a valuable investment which protects your even more valuable investment - your home,” has been posted on Riverside Facebook Page.