Real Estate Definition: Property Title Search

If you are buying a home or another piece of real estate, you have probably heard that you will need to get a property title search. With all the closing costs and other expenses you are paying, you may be wondering if a title search is really necessary. The bad news is that it is necessary. The good news is that it can prevent all sorts of serious problems down the road. Once you understand what a title search is and why you need it, you will see that it is worth the effort and expense!

What Is a Property Title?

Before we get to property title searches, we should clarify what a property title is. A property title is the legal right to own, use, or sell a piece of real estate. When you “hold title” to a property, it means you are the rightful legal owner. A title can be held individually, jointly, in a trust, or under a business entity like an LLC.

Title also refers to any legal claims or restrictions on the property, such as:

• Other Mortgages: If someone else has used the property as collateral, the lender still has a claim to it. The mortgage needs to be paid off for you to use it as collateral for your own mortgage.
• Liens: These are legal claims against the property, often because the current owner owes money, like unpaid taxes or contractor bills.
• Easements: These give someone else the right to use part of the property, usually the municipality or a utility company. Easements can also refer to shared land use, such as a driveway you share with your neighbor or water access you share with other people in your community or the general public.
• Zoning Restrictions: Local rules that control how the property can be used (ex, residential vs. commercial or industrial). Zoning restrictions also determine what you are allowed to build on that property.
• Covenants or Conditions: Rules tied to the property that might limit things like fence height or what colors you can paint your house.

Property Title vs Deed

The term “property title” is often confused with a property deed, but they refer to different things. The title is the legal concept of ownership, whereas the deed is the physical document that proves the ownership, the same way car registration papers prove that you own a car.

When you buy a property, the seller signs a deed transferring the title to you. That deed is then recorded in public records, making your ownership official.

What Is a Property Title Search?

A title search on a property is a formal examination of public records to confirm a property’s legal ownership and dig into any existing issues that might affect your rights as a property owner. The property title search is also for the lender so that they know the entire value of the property is available as collateral.

During a property title search, a title company, real estate attorney, or abstractor reviews these records:

• Past deeds and ownership transfers.
• Outstanding liens or unpaid taxes.
• Bankruptcy filings.
• Easements, HOA laws, rules and restrictions.
• Legal disputes involving the property.

The goal of the property title search is to verify that the seller truly owns the property and can legally transfer the title to you. It confirms that no other person or entity has a legal claim to any part of it.

Why Is a Title Search Important?

A title search on a property protects everyone involved in a real estate transaction, but especially the buyer and the lender. It can uncover all sorts of issues known as “clouds on title,” including:

• Fraud or forgery in past deeds.
• Undisclosed heirs of previous owners who may claim ownership.
• Unpaid taxes or HOA dues that could become your responsibility.
• Judgments or liens from lawsuits or unpaid debts.
• Errors in public records or clerical mistakes.

These issues can delay your closing, cost you money, or result in legal disputes down the line. A clean title means that your home purchase will proceed smoothly, the lender is satisfied, and you have peace of mind going forward.

How to Do a Title Search on Property

Fortunately, you do not have to do the title search yourself; in most real estate transactions, a property title search is handled by a title company or real estate attorney. However, it is helpful to know how the process works, especially if you are buying a property without a lender or through a private sale. Here are the standard steps in a property title search:

• Identify and locate the county recorder’s office: Every real estate transaction is recorded at the county level. Most counties now offer online access to land records.
• Search the property by address or parcel number: Using this identifier, you can look up the deed history, liens, mortgages, and other documents related to the property.
• Review the ownership history and recorded documents: Here, you are looking for a clear chain of ownership, no legal disputes, and no unresolved debts attached to the property.
• Check for liens, easements, or restrictions: These must be addressed before you move to the next step of the buying process.

If you decide to do a DIY title search, be advised that it can be tricky; it could be worth the expense to hire a professional to do it for you.

What Is Title Insurance?

Even the most thorough title search could miss something. Title insurance protects against losses due to undiscovered title issues. If a title problem is discovered after closing, title insurance covers your legal fees or financial loss.

There are two types of title insurance: lender’s title insurance, which is required by most lenders, covers their interest in the property in case a title issue comes up later, and owner’s title insurance, which covers the buyer. Owner’s title insurance is optional but highly recommended.

A property title search is one of the most important steps in a real estate transaction. It protects your investment, ensures that the seller has the right to transfer ownership of the property, and helps uncover any hidden legal or financial issues that could become your problem down the road. If you are buying or selling a home, do not overlook this critical step. A clear title, backed by title insurance, frees your path to home ownership with complete peace of mind.