When you hire a title company to examine the title of a property you’re considering, they will perform a title search on your behalf. A title search examines the rights that come with a real estate property, ensures the current owner has the right to sell, has no unpaid taxes or liens, and that you’re getting the rights you’re paying for. If title insurance is being considered in the transaction, the title company will determine if the property is insurable.
Chain of Title
The chain of title is the first part of the search, and it shows the history of who has owned the property, from its creation by John Johnson in 1837 all the way to the current owner, Ron Swanson. This information could come from public or private records, and could be held in either a digital format or something more outdated, like punch cards. This is essential for securing the title of a property you wish to purchase.
A tax search determines the amount of taxes that will have to be paid on the property, and whether there are any past due taxes from previous owners. If there are unpaid taxes, this could cause the local, state, or federal government to sell the property.
Report on Possession
The report on possession is a physical analysis, where an inspector confirms the lot size and any improvements that have been made on the property. They will also look for easements that may not have been disclosed. These are areas where a party has been granted the right to use some part of the land for a particular purpose.
Judgement and Name Search
This search ensures the owner does not have former judgements against the property. A judgement is a lien that uses the property as collateral for any money owed.
The judgement and name search also compares all variations of a name to make sure the owner, or someone with a similar name, doesn’t have liens against them. For instance, if John Johnson is a stand-up guy, but Jean Johnson hasn’t been paying his child support and gets a lien put on his property, it could mistakenly be put on our dear John.
After the search is finished, the title company will determine if the property is insurable. By checking to make sure the seller has the right to sell, unpaid taxes or liens, easements, and judgements, a title company gives you the peace of mind that the property you bought is the one you’ll get.
Hopefully we’ve given you a better idea of what a title search is, but if you have any more questions, please call Monarch Title at any of our Missouri locations.