What is the Importance of a Title Search During a Closing?

One of the most important functions of a real estate closing attorney is to undertake a title search and examination on the target property. This important task should be done before you, as the buyer, get to the closing table, so you won’t likely hear much about the title search unless it turns up any issues. However, it’s worthwhile to understand exactly what happens during a title search and examination.

What is a Title Search, Exactly?

Before you close on a house, an attorney (lawyers are required for real estate closings in North Carolina), will conduct searches of all available public records to ensure there are no encumbrances or issues with the title so you can eventually own the property free and clear. There are a variety of databases that need to be visited in order to conduct a thorough title search. Title searchers look for mortgages, judgments, paving assessments, liens, divorce settlements, easements, encroachments, and other public documents that affect title.

An important note here is that tax liens and levies generally receive priority relative to other creditors. Title searchers should look at federal and state databases to ensure that the property is free of tax encumbrances. Other than that, title searches are generally performed at the county level. Almost every county in North Carolina (including Iredell and the other five counties we serve) has publicly available records online.

Title Examination

After the title search is conducted, the title examination is performed. A skilled real estate attorney analyzes documents that are gathered during the search and verifies the true owner of the property. Any debts or liabilities are dealt with before the title is transferred. Ultimately, the title is either marketable (in good legal condition) or not, a determination to be made by the closing attorney.

Another determination that should be made is whether or not the title is insurable. Mortgage lenders generally require borrowers to have some amount of title insurance to property their interests. An effective title insurance policy protects against much more than just liens, levies, or other encumbrances that may attach to the property. There are too many protections to list here, but policies afford protection against countless types of fraud that might affect titles.

Conclusion

Title searches, examinations, and insurance might seem like more hassle than they’re worth, but nothing could be further from the truth—especially when you hear about homeowners who had large surprise bills due to not performing due diligence on property. Thomas & Webber’s goal is that nothing falls through the cracks during your real estate closing. We’d love to discuss your needs as a realtor, homebuyer, or home seller sometime soon.