In this six-part series from Maverick Title Services, LLC, we will describe the process that a title company uses to ensure a buyer’s property’s title is clear for the issuance of a title insurance policy.
Part 1: Requesting Title Insurance
Enter stage left, Patty Purchaser! Patty is a first-time homebuyer. With mortgage rates coming down, she decided that now is the time to buy. After finding an agent, she took to the streets, viewed multiple listings, and attended several open houses before finally deciding on THE ONE.
Patty has always been great with money and was able to submit a cash offer, which was quickly accepted. With no lender in need of a loan policy, the seller suggested to Patty that she skip the “hassle of waiting for title” and proceed directly to the closing. As much as Patty wanted to be in her new home within the week, Patty was also a smart cookie and knew she shouldn’t rush into an important decision. With that in mind, Patty asked her attorney to order Title Insurance.
Later that afternoon, an email was sent by Patty’s attorney to the Title Agency, and they confirmed that the title search request was received. The Title Agency was quick to get to work.
“What exactly are they searching for?” Patty asked her attorney when he called to let her know the process was underway.
“Well,” Patty’s attorney chuckled, “When you looked at the house, you saw what was there. But a title search looks to see what was there before and what may still be lingering, hidden in the wings. The searchers will do research into records recorded at the County Clerk’s Office. They will look at the individuals or entities who have owned the property throughout the years and how they came into possession of the property. This is called the Chain of Title. Each owner is a link in the chain and if one of the links is missing or defective – there may be a problem in establishing who currently owns the property and their ability to sell it as well.”
“That makes sense.” Patty breathed a sigh of relief. “Then if everything checks out, we should be good to go?”
“Not quite” the attorney responded, “Along with the search into prior owners, the searchers will look into any pending judgements or liens against the property. They will also do Patriot and Tax Searches along with anything else that may be appropriate to the situation or location. Think of it like a puzzle. Many people start with the perimeter. That is what you’ve already learned about the property. You know the layout, the structure, the appearance. But that only scratches the surface. The Chain of Title fills in many of the middle pieces and brings to light any title defects, conditions, or restrictions in the relevant deeds. Finally, the additional searches fill in the last of the remaining pieces. Only then can you truly see the whole picture, the entire story of the property you want to buy.”
Patty thanked her attorney for the explanation and hung up the phone. The perimeter had been laid, and the middle pieces were being sorted by the Title Agency. She couldn’t wait to see the whole picture and finally be in her new home!
Stay tuned and follow Maverick Title Services for Part 2: The Title Examination.