When you purchase property, you should receive a title. The title is a document that has specific information about your property. Often, if you buy a piece of land or a new home, you will have to do a title search. The title search ensures that your property is clear for you to purchase.
Here is what you need to do when you make your first real estate investment.
Check for Prior Claims to the Title
When you do a title search, an investigator will look for any prior claims to the title. He or she will look through public records and land records. About one-third of all title searches result in issues being brought to the surface. These issues may include undisclosed owners, contractors who are owed money, forgery or a previous owner’s failure to pay taxes on the land. All of these can turn into hang-ups when purchasing real estate.
Purchase Title Insurance
When you sign a contract to purchase a house, you need to also purchase title insurance. This will protect you and the lender. If any problem occurs when you do the title search, this policy will cover the amount of money that you spent. You may have nothing to do with the history of the house, but you still need title insurance.
Keep Your Title Safe
Once you receive your title, you need to put it somewhere safe. If you have a safe or locked file cabinet in your home, you can keep the title there. Some homeowners choose to put the title in a safety deposit box at the bank. If you sell the property, then your title will no longer be valid. The new owners will receive the updated title in the mail that claims they are the legal owners.
If you do lose your title, you don’t have to panic. You can go to the clerk’s office to request a new copy of your title. If you have a mortgage you can also contact the bank. The lender will normally have a copy of your title on file.
If this is your first time purchasing real estate, you probably have a lot of questions regarding your title. A title search is typical in real estate investment and often has to occur before you close on the home. If you have any questions about your investment or the title of your property, set up a consultation with a real estate lawyer.