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Real estate investment is a game of knowledge. The more you know, the better decisions you can make.
If you don’t know what a home title search is, then you’re in the right place. In this article, we will cover what it is, concepts within it, why it matters, and how to avoid title fraud.
If that sounds interesting to you, which it should, then keep reading to find out more.
So What Exactly Is A Home Title?
Before we get to cover a home title search, let’s cover the basics. A title refers to the legal ownership of a property, it gives the owner the right to sleep, live, and use the property as they like.
A title can be seen as a bundle of rights, which are transferred from a seller to a buyer. And they usually cover this:
- The right to possession (You own it).
- The right to control (You can use it without breaking laws).
- The right to enjoyment (Enjoy it legally).
- The right to disposition (If it’s yours to keep, it’s yours to sell).
- The right to exclusion (You decide who enters or loiters around the property).
And all of that sounds great, especially when you consider you get the title when you buy the home, and you can sell it someday on the same principle. However, there’s one iffy. You cannot transfer ownership until a title has been cleared. Thus, you need to prove that your home is free of defects, like bankruptcies, judgments, liens.
The buyer of the home does not want to take home with your problems as collateral. Before a sale is closed, a title firm or lawyer will do a title search to check for potential problems.
All issues found on the title have to be cleared, otherwise, a sale cannot be closed.
What Is A Home Title Search?
From the prior sentences, you can deduct exactly what a home title search is, but we wanted to add some more substance.
In premise, a title insurer will conduct a thorough examination of the public records for the property. These include court records, deeds, indexes, etc. The purpose of the search is to verify the right to transfer ownership and to discover any encumbrances or defects.
A title search should present all defects, judgments, liens, restrictions, unsatisfied mortgages, unpaid taxes, land-use restrictions, and much more. And keep this in mind, that a title policy does not protect the buyer. A title defect could have started during the ownership, and a new policy can help protect your future rights when you purchase the property.
Some of the most common defects are:
- Contractor liens
- Unpaid taxes
- Child support liens
- Invalid title transfers
Until an owner can prove the absence of defects, or resolve those that do come to hand, a title cannot be transferred to a buyer, and the sale will have to be paused for a short while.
If you want to perform a title search on your own, visit this website.
Anything Else? Yes, the Abstract of Title
Another term worth mentioning is the abstract of the title. Even though the title is not a physical document, but more a concept – any material fact that holds relevance to the title may or may not be documented in abstract form.
The abstract of a title is a detailed property abstract, which considers the legal history and past ownership of the home. As a homeowner, you might have the abstract, but you also might not.
The abstract often covers the summary of the primary grant, any following changes to ownership, an encumbrance on the property, and statement by a person who has prepared the abstract as a complete and accurate document.
How Can I Protect Myself From Home Title Fraud?
In most cases, title fraud occurs after identity theft. Most document requests are done online, which means it’s easier to fake authentic access. Elderly people are common targets, as they have higher equity in the home, and might not be as tech-advanced as the younger folk.
In order to minimize the likelihood of experiencing home title fraud, here are some things that you can do.
Check Credit Report
Taking a look at your credit report can help you recognize financial actions, which might have occurred in your name. However, they might also show the same, but help determine whether or not it was under the guise of your identity.
Some activities with your name occur without you even knowing, so keep a good eye on all channels of identity exposure.
Check Home Info
Make sure to check your home information, and see if anything has been changed. Contact the local deed office, and ask them about the title/deed. If all is the same as before, you should be good.
Watch Incoming Bills
Ensure that you are getting all of your bills. Starting with your tax bill, all the way to a mortgage bill. Not receiving documentation is a sign of identity theft.
Employ the use of a service provider who specialized in home title fraud. These firms account for title insurance, title protection, and much more. Make sure to research the companies, because people might be posing as them to scam owners.
Home Titles Explained
Now that you know what a title is, what a home title search is, and how you can avoid fraud – you have acquired new-found knowledge that will separate you from the rest of the real estate investors.
Make sure to stay on your toes, look out for obvious irregularities, and you should be fine. And don’t be afraid to ask someone who knows more, because then you can get to find out how’s something done from the inside.
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