Purchasing property is a complex process. A buyer should be aware that even on closing day there may be some surprising issues that delay or even cancel the sale.
Issues involving the title can cause a headache for potential buyers. Conducting a title examination can prevent any surprises and allows time to fix any possible problems.
Common title issues
According to the National Association of Exclusive Buyer Agents, a title examination may reveal some of the common title issues. One is the existence of a lien on the property. Full payment for any lien is the responsibility of the current owners, but if the sale closes before the discovery of the lien, payment is the responsibility of the new owners.
Missing heirs, or the absence of a will upon death, can affect ownership of the home. If the deed to the title came upon due to illegal activity, this also may affect deed enforcement. Other common issues include clerical errors, forgeries, boundary disputes, encumbrances and unknown easements.
Title examination standards
According to the University of Oklahoma Law School, the purpose of a title examination is to detect any defects, irregularities and encumbrances that may result in litigation or other legal or financial trouble. The examiner must report any questionable information to the client. The seller should address any issue before completion of the sale, and unresolved title issues may qualify the buyer to back out of the deal with no financial penalties.
Spending the time and money to conduct a thorough title examination is important to prevent post-sale issues that can have legal and financial consequences for the new owner.