The first step in the title clearing process is to order a title search. A title search is the specific process by which title professionals determine what has occurred with the title and where problems may lie.
Understanding how the title search works, what is in the title search, and what that means for the closing process moving forward can help to set your expectations for how the overall title clearing process will go.
At a high level, a title search pulls together available public records regarding a property’s title.
As a practical matter, a title officer or search agent will perform a search using the description of the subject property to pull from a variety of sources to try and understand the full history of that property. Depending on the market, the professional may analyze state, county, and/or local municipal public records, which can include items such as deeds, easements, land surveys, wills, judgments, lawsuits, and any other records found in the public record. The search agent will also generally run a search on the parties to the transaction to determine what judgments our other records may affect the transaction.
The title professional will then pull this information together into a title search report, which is then carefully reviewed and used as the basis for your title commitment.
Ideally, the report contains all the historical data regarding a property. The report will show all previous owners, how and when the property was conveyed from owner to owner, what each owner did with the property that might affect the title, and the current state of the property based on all the publicly available historical facts.
By creating this history of the property, and more specifically the history of the title being conveyed, the title search should reveal any matters which may affect your title. Examples include prior mortgages which should be paid at closing or other liens or encumbrances on the property that should be satisfied by the seller. Property taxes and assessments are also searched so they can be dealt with pursuant to the terms of the purchase agreement. Finally, the search should reveal any easements or other property interests affecting your title that may impact your enjoyment and use of the property in the future.
Generally, once the title search is complete, the title company will use that search to create your title commitment. The title commitment is an important document which both informs the parties about the condition of the title the buyer will receive and sets forth the requirements that need to be cleared in order for the transaction to close and a title policy to be issued.
The title search is a key component of the title clearing and title insurance process. By conducting this historical analysis of the public record, you and your team will have a better understanding of the condition of the title being conveyed, and what steps are necessary to ensure that the title is clear going into the final stages of your closing.
The information provided in Peak Title Professionals, does not, and is not intended to, constitute legal advice. All content is for general informational purposes only and is not intended to provide a complete description of the subject matter. Specific processes will vary based on applicable law. The title and closing process will be handled by a third-party attorney to the extent required by law. Product offerings vary by jurisdiction and are not available or solicited in any state where we are not licensed.
