If your home has a problem with the title discovered during the preparation for closing, you cannot sell it. Title issues have to be fully resolved before a home can be sold, and the problem is prevalent enough that 11% of closing issues revolve around title problems.
Title issues can surprise even the most diligent home sellers. Even if you think your title is clean, it may have issues that you are not fully aware of or that were hidden when you originally purchased it.
The best way to protect yourself from an unwanted surprise is to perform a title search to clear up any issues early in the selling process. When you get to closing, you will not have any unexpected problems or delays.
What Are Common Title Issues?
Before you can learn how to resolve title issues, you must first identify them. Here are some of the most common problems you can face with your title.
When your home stands as security for a debt or other obligation, it has a lien placed against it. The most common lien is a mortgage, but you can also end up with a lien because of back federal, state, or local taxes or unpaid bills to contractors. The lien gives the other party the right to foreclose on your home to pay back the debt owed.
You may think that you are in the clear because you only have your mortgage and your taxes are up-to-date, but this is not always true. Liens can be placed on the property from previous owners, only to surface later and surprise you.
Liens can also come in the form of judgments, which are court-obtained documents from unpaid creditors or a parent requiring child support. These documents create liens against property, and the only way to remove them is to pay back what you owe.
2. Missing Heirs
If your home’s previous owner passed away before selling the home, you could end up facing heirs that come forward claiming right to the property. These heirs may have been unnamed or missing when the owner died, but may have a legal claim to the property through lineage or other documentation.
3. Public Record Errors
People are not perfect, and sometimes they make mistakes, even when recording details about a home’s deed. A clerical or filing error may seem minor, but these can take quite a while to resolve. Performing your title search early in the selling process gives you the time to fix these.
4. Survey and Boundary Disputes
Before selling your home, you must make sure that you have the property’s boundaries clearly defined. If there is a dispute, then you may need to have a survey performed to define it more accurately. Your home’s new owner needs to know where the property line lies.
5. Identity Concerns
If you have a common name, then you may be mistaken for someone else who is facing judgment. For example, if someone in your community shares your name and is taken to court for back child support, the judge could mistakenly file a lien against your property.
To resolve this title issue, you will need to fill out an identity affidavit. Similarly, if your name is similar to the previous owner, you may face investigation for “falsely impersonating” the previous owner.
You may think you’re safe here because you don’t have a common name, but this issue could apply to the previous owner. You could lose your property altogether if the title search finds that the home was sold to you by a false owner.
How to Resolve Common Title Issues
If your due diligence shows that there is a title issue, you must address it before selling the property. Some mild issues can wait until closing, but others, especially name identity problems or human errors, take time and planning. You must be able to gather the necessary documentation to prove your claim to the home is accurate.
The good news is you don’t have to know how to resolve title issues alone. Start the process by choosing a title company. Title companies not only find problems but also help present solutions you can use to resolve them.
Research title companies carefully, because you need one that will do the job right. Choose a quality title company that communicates well so you are always informed about what is happening with your case.
If your title search finds serious issues, consider hiring a real estate attorney. Find one that has worked with many clients and has a good track record of successful title dispute conclusions.
Remember, though, there will be costs involved with clearing your title, and when you hire an attorney you will also have to pay attorney fees on top of those costs.
Title Issues Are a Pain, but There Is an Alternative
Title issues must be cleared before you can sell your house. While the above list talks about the most common title issues, it is not exhaustive.
You may find other issues beyond this, and every single one has to be addressed. Learning how to resolve title issues is time-consuming, and the processes can be costly. It may even involve hiring an attorney.
Most homeowners are not aware of title issues. The first step in this process is a title search. If you find an issue, contact a title company. If the issue is severe, contact an attorney.
If this sounds like too much time, hassle, or expense, you may be right. In many instances, HomeGo can help. HomeGo will walk you through the title clearing process, or in some cases even clear it for you.
You can save the expenses of the title company and attorney, sell your home quickly, and get a fair cash offer. If you suspect title problems or simply want to avoid the risk altogether, reach out to HomeGo today.