Chain of Title for Your New Home — What's Involved in the Research
A Chain of Title is the chain, or record of owners of a piece of real estate that dates from the current owner all the way back to the very first owner. While a buyer COULD conduct a title search themselves, most will have a title company conduct the title search for them. And if you are using a mortgage to finance your home, they will typically require a qualified professional to conduct the title search anyway.
But let us show you what the process looks like, just in case you might one day be faced with having to do this task. And besides, knowledge is power!
When conducting these title searches, you’re looking for any errors in these records that could prevent you from being able to purchase it. You can do this by going through past deeds, tax records and other transactions involved with this particular property. The last thing you want to hear is closing has been delayed due to errors in the record history.
According to HomeClosing101, title searches show problems or issues in at least 1/3 of all residential real estate transactions. Of course, there are always unknown issues in which title insurance would cover, but we will discuss that at another time.
Right now, let’s discuss all that’s involved in a title search. Whether it’s you or a title company conducting the search, the process is the basically same.
Have as Much Information as Possible
Start by knowing the address of the property in question and the current owner’s name at the very least. You can obtain this information from your Realtor who will have access to the current records. It will be most helpful to also have the property tax ID.
Start Your Research Online
Before heading to the county office to start looking at in-person records, begin your search online. Visit your county assessor’s website and find the property search, then type in the address or the current owner’s name to locate the property. This is where you can find the Property’s Tax ID number if you didn’t previously have this information.
Each county is different, and some counties won’t have this information online, forcing you to conduct all of your research in-person. If you are having trouble locating a website for your county assessor, call the county to see if they have a website. On the other hand, some counties will have the entire process online, so do a search for the county recorder’s website before heading in. It just might save you a trip.
Begin the Property Title Search
Whether you can do this from the comfort of your own home or you have to go in to the county office, go to the property title search. It will be different for each county, so if you are having trouble locating this search, call the county or speak to the front desk for assistance. Either way, this information is open to the public. As you go through these records, have a notebook and pen handy to write down notes. Also pay close attention to the consistency of the names, dates, addresses, lot size and all other information given on this property as you are sorting through these files.
Once you’re on the county’s online screen to begin searching records:
- Find the most recent Deed first. The name listed should match the name of the person from whom you are buying the home.
- Gather all the deeds available online or in-person that you can find. Be sure to go back to at least 1940 to discover “the chain of title.” If in-person, you will find them in deed books (the recorded deeds will list a deed book number and page number that you can reference). Each deed should contain information about the previous owner and deed, as well as any liens they may have. You can also find maps of the property at the recorder’s office to give you a visual representation as well.
- As you’re going through and exploring these deeds, make sure each buyer is listed as a seller when it changes ownership, and make sure there are no gaps in the dates shown.
Next…
Check for Liens, Mortgages, Outstanding Taxes and Judgments
Once you have found all of the needed deeds dating back as far as needed:
- Conduct a tax search at the tax assessor’s office to seek out any outstanding taxes on the property. Make sure the property has no liens before you sign anything, as these COULD transfer to you upon closing.
- Search for any judgments against the current owner or any previous owner where the property acts as collateral until the judgment is satisfied. Unfortunately, the home is unable to sell if there is a judgment lien so be sure to verify this.
What to Do If You Find a Discrepancy — and Other Time Saving Tips
If you find a discrepancy in your chain of title research, you can try asking the current owner (or their Agent) if they have any of the missing documents (which would then need to be recorded) or you can seek assistance from a real estate attorney prior to purchasing this specific property.
If you’re having trouble with your research and don’t think you can complete it on your own, you could always call your County Registrar of Deeds and ask if they have any good recommendations on someone who can pull a title search for you (someone independent, which is also who a Title Company might use). However, your best bet may be to hire a Title Company to handle your Chain of Title search. If they find any defects, they will know what paperwork needs to be filed at the courts in order to resolve the issues.
Also, consider obtaining title insurance, which will protect you against financial loss if title defects should be found after closing. This is very typical with most real estate transactions.
Because processes have changed and improved over time, there were times when certain documents and procedures weren’t required, and therefore some searches may prove to be too complex for you to conduct on your own.
And because of the risk involved if you should miss any information, it’s always better to hire a professional who does these types of services and searches every day. You never know what you could find. A property owner may inadvertently or intentionally omit disclosing information, especially if they really need to sell their property. And sometimes a property owner may not even be aware of some of the issues that have been recorded. Whether you do the research or you hire someone, it’s very important to take the time and do the necessary searches to assure you are buying a property with a clean title.
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