Before the property can change ownership, the issue must be resolved.
What Title Issues Could a Title Company Uncover?
- Outstanding loans on the property
- Liens against the property
- Unpaid fees on work performed on the home
- Undisclosed heirs or owners with claims to the property
- Special assessments on the property
These are just a few of the issues a title search can uncover, but certainly not all.
So, what happens when a legal issue is uncovered? Here at Lilly Title & Settlement, we notify both the buyer and the seller.
Sometimes these issues can be resolved, and the sale goes through. Sometimes they cannot be resolved, and the sale does not go through.
Believe it or not, when a sale does not go through because of a title issue, that’s a best case scenario for a possibly much worse outcome.
What A Title Search Can’t Uncover
What do we mean by that? Title searches can only find what’s been legally recorded. For the buyer who found out that there was a cloud on the title, a potentially devastating financial outcome was avoided.
The buyer is now free to find another property without any legal baggage or monetary loss.
But title searches cannot find:
- False representation
- Illegal trusts
- Lost wills
- Adverse possession
Even the most thorough title search will not pick up these defects because they would never appear in the records.
Our hypothetical buyer was lucky. The defect was found to be legally recorded. But many times, that is not the case.
How to Protect Yourself Against What the Law Can’t See
When you’re making the biggest purchase of your life, you cannot afford to leave any legal detail to chance. Doing so, could cost you one of the most valuable assets of your life.
Banks want to protect their investment. It’s why they require the buyer to pay for lender title insurance---to protect the lender from any possible future illegal or questionable circumstances with the property.
However, lender’s title insurance does not protect the buyer. If in the future, there’s a real estate legal issue with your property, you’re on your own. The bank gets their money, but you could potentially lose your investment and your home.
That’s why we encourage buyers to purchase their own homeowner’s title insurance.
A one-time fee at closing, your homeowner’s policy will cover so many of the “common” legal issues that can occur when transferring ownership from one person to the next—for as long as you own the property.
Not only does it give you peace of mind, but it also increases the re-sale potential of your new home.
If the issue cannot be resolved, it’s unfortunate, but at least the error was legally recorded and there was no monetary loss.
Just make sure on the next property you buy to include homeowner’s title insurance. This will protect you against financial loss and the payment of legal fees to resolve any of the common legal issues that could arise.
When you’re ready to close on your next home, turn to Lilly Title & Settlement Company, a woman-owned company in Staunton, VA. Our diligent and careful attention to title search title insurance, and closings has won us rave reviews.