What do you need to know about your homes title.
Most people have heard of “title” in regards to a home purchase or sale, however, it’s harder to get a real grip on what “title” really means. Talking about title is not quite as glamorous as talking about staging or “101 ways to decorate your home” – however, it has a great impact on what is most likely the largest investment of your life. Here it goes:
The term ‘title’ is broadly used to describe matters affecting your legal rights to own, possess, use, control or sell your property.
The title document on a car, registers all owners ON the document itself and is transferred with this ONE document. In real estate title is not ACTUALLY the document but the right to various aspects of the property. This right, these rights, are transferred by via deed, there are various kinds of deeds:
How do you “hold” title?
This pertains to two things:
1. When someone asks you this, then he or she wants to know who will legally own a property. One or more people can be on title, an entity like a trust could be named as the owner or a company. Precise naming and spelling is important.
2. Maybe he or she wants to know, if you own you property “in Severalty” (alone or read), in “Joint Tenancy” (let’s just say “together” or read here), it is the most common way for particularly married couples to hold title, or as ” Tenancy in Common”, where each owner holds an individual, undivided ownership interest in the property,usually used for groups, partnerships (more).
Where can I look up title information?
If you go to the recorders office and look up a certain property (and you can look up ANY), you can find all document that have ever been recorded in regards to this property. Any rights, easements, encumbrances, liens, covenants and so on.
Why is it important to have an unbroken chain of title?
All rights and encumbrances on one particular property (Schedule number/ property description) are recorded in the public recorders office. You will also find some property information at the assessors office (online). If you go to the public recorders office archives you should be able to find an unbroken chain of title evidencing continuous ownership, once you start digging through all the paperwork (digitized or hardcopy). Try and follow this chain and all it’s deeds from today back to the original owner -most likely a homesteader who was granted the property from them US government. It’s a laborious but most intriguing and rewarding process.
An unbroken chain of title is important to make a property marketable, meaning it is free to transfer to a new owner, if there are any doubts -the title is clouded – see below. If there is any doubt in ownership, it would be wise to order an abstract via an attorney. When you purchase a home, you will get a title search in your documents.
Clouded Title
If you can’t establish clear ownership to the real estate, because there is a recorded lien, encumbrance, easement (or other) that cannot be clarified, then your title is considered “clouded”
Buyers want a marketable (clear) title – one that says ‘Buyer A’ is owner. Banks won’t loan money on a clouded title; afterall, they want to make sure that they CAN take your home away -and re-sell it- if you can’t pay. New recordings of claims against a property can be filed with no notice made to the property owner, and sometimes are not discovered until a title search is done, usually when the property is getting ready for sale. This explains, why detailed research of title on and off record as well as all due diligence is so crucial when you buy a new home.
You will not be able to sell your home if title is clouded. Should you panic? Absolutely not (yet). Most properties have some sort of encumbrances or other rights to the title recorded. However, some are more acceptable than others. There might be a deed of trust or mortgage recorded, which is usually acceptable, as it is being usually released with the sale of the home. A tax lien? Not so much. Sometimes, resolving the issue could be as ‘easy’ as pay a certain amount.