Real estate is a major investment, and a property title search is a vital process that helps confirm that the property being purchased is not tied up with any legal complications that may endanger the buyer. It is a process of searching through records of a certain property to determine the current owner of the property and if there are any other claims, liens, or any other restrictions on it. This is because making some mistakes while in the process of operating a business can lead to legal and financial problems.

Here are five mistakes to avoid during a property title search:

1-  Failing to Hire a Professional Title Search Company

Another common error is trying to carry out a title search without the help of a professional. Title searches are not an easy process, and it is crucial to have a good understanding of deeds and property laws. When one hires a property title search company or a real estate attorney, one is assured that the search conducted is comprehensive and accurate.

Why This Matters

  • Accuracy: Professionals are trained to spot issues that an untrained eye might miss.
  • Efficiency: They can complete the search more quickly than an inexperienced individual.
  • Legal Protection: They can provide legal advice and guidance if any issues are found.

2- Ignoring Existing Liens and Encumbrances

Liens and encumbrances refer to any claim or interest that is asserted against a property, for instance, where there is an outstanding debt. Some of the most often encountered types of liens are mortgage liens, tax liens, and mechanic's liens.

Why This Matters

  • Financial Risk: You could be responsible for paying off the existing liens, significantly increasing the cost of the property.
  • Legal Complications: Unresolved liens can lead to legal battles, affecting your ownership rights and possibly leading to foreclosure.
  • Resale Issues: Future buyers will conduct their own title search, and existing liens can deter potential buyers.

3- Overlooking Easements and Restrictions

Easements and restrictions are legal permissions and covenants that limit or allow the use of the property by certain persons. For instance, an easement could give the neighbor a right to cross through your property, or there could be certain limitations on the usage of the property or the structural changes that can be made to the property.

Why This Matters

  • Usage Limitations: You may not be able to use the property as you intended, which can be a significant inconvenience.
  • Value Impact: Easements and restrictions can affect the property's market value and desirability.
  • Legal Disputes: Violating restrictions or not respecting easements can lead to legal conflicts with neighbors or local authorities.

4- Not Verifying Property Boundaries

The problems with property boundaries can cause conflicts with neighbors or problems related to local zoning ordinances. It is crucial to confirm that the limits stated in the title correspond to the real limits of the object of interest. This can include looking at the surveys and maps and may even require getting a new survey done.

Why This Matters

  • Neighbor Disputes: Disagreements over property lines can lead to prolonged and costly legal battles.
  • Building Violations: Construction or improvements that encroach on neighboring properties or violate zoning laws can result in fines and mandatory changes.
  • Property Value: Clear and accurate boundaries can affect the value and appeal of the property.

5- Overlooking Past Ownership Issues

The chain of title is the history of deeds that convey the ownership of the property in question; read all the documents carefully. Unfortunately, ignoring these inconsistencies, including fraudulent conveyance, computational mistakes, or unknown beneficiaries, would lead to legal issues. It is important for you to have a clean and unambiguous title to the property you are buying so that you have no legal questions concerning the ownership of the property. 

Why This Matters

  • Ownership Disputes: Past ownership issues can lead to disputes over who holds the legitimate title to the property.
  • Title Insurance Claims: Irregularities can complicate or invalidate title insurance claims, leaving you unprotected.
  • Resale Challenges: A problematic chain of title can hinder your ability to sell the property in the future.

Conclusion

It is crucial to know the status of the property title before buying a property in order to avoid any future complications and to ensure that the transaction will be problem-free. Therefore, to avoid some of the most widespread problems, it is recommended not to hire professional service providers, not to pay attention to liens and encumbrances, not to consider easements and restrictions, not to verify property lines, and not to investigate prior ownership issues. It is always wise to seek professional assistance and take time to review the title in order to make sure that it is clear and free of encumbrances.