How can you ensure a clear property title?

1 Check the title history

The first step is to check the title history of the property, which is a record of all the previous owners, transfers, mortgages, liens, judgments, easements, and other legal documents that affect the property. You can do this by ordering a title search from a reputable title company or attorney, who will examine the public records and verify the accuracy and completeness of the title history. A title search will reveal any potential problems or discrepancies that could affect the title, such as missing heirs, forged signatures, unpaid taxes, or boundary disputes.

2 Purchase title insurance

The second step is to purchase title insurance, which is a policy that protects you from any financial losses or legal liabilities that may arise from defects or errors in the title that were not discovered by the title search. Title insurance covers both the lender and the buyer, and it is usually required by the lender as a condition of the loan. Title insurance will pay for any costs or damages that you may incur if someone challenges your ownership or claims a right to the property, such as a lienholder, a creditor, a fraudster, or a relative of a previous owner.

3 Resolve any title issues

The third step is to resolve any title issues that may be found by the title search or the title insurance company before closing the deal. This may involve clearing any liens, judgments, or encumbrances that are attached to the property, obtaining any missing or defective documents or signatures, correcting any errors or mistakes in the records, or settling any disputes or claims with other parties. You may need to work with the seller, the title company, the attorney, the lender, and any other relevant parties to resolve any title issues and ensure a clear and marketable title.

4 Review the title commitment

The fourth step is to review the title commitment, which is a document that the title insurance company issues after completing the title search and agreeing to insure the title. The title commitment outlines the terms and conditions of the title insurance policy, including the amount of coverage, the exclusions, the exceptions, and the requirements. You should review the title commitment carefully and make sure that you understand what it covers and what it does not, and that you comply with any requirements or requests from the title insurance company.