Preparing to close on a home can be exciting. As exciting as it can be, real estate title issues can throw a wrench into the works. It might look like your dream home, but unresolved title issues could turn it into a nightmare.
How do you discover these issues before it is too late? What can you do to find protection from these issues? This post will examine some common title issues and how to avoid them.
An unknown lien can be a significant issue for a property transaction. The creditor could put a lien on the property if the owner owes money. In most cases, you can’t remove a lien without payment of the debt. It can certainly put a stop to a real estate sale. The buyer or seller might have to settle the debt before transferring the title.
People make mistakes. When these mistakes involve the deed to a home, it can cause issues with a sale. It could be anything from typos and misspelled names to incorrect listings for square footage. Even if they seem minor, the owner must address these issues before the sale.
Some deeds can be illegal. For example, a previous owner may have included a minor on the deed. You can also find fraudulent deeds. Examples could include forged signatures or fraudulent notarization. In these situations, the deed might look clean on the surface, but the fraud issues could cause significant problems.
You might find property titles with unclear boundaries. If the boundaries are not clear, a neighbor or some other party might be able to dispute the boundary. Some properties can also have boundary disputes. There can even be two or more surveys that claim to settle the property lines. Buyers should not close on a property if the boundaries are unclear or in dispute.
When a person dies, their property usually goes to their heirs. In some cases, there may be unknown or missing heirs. The discovery of an unknown or missing heir could affect the seller’s right to transfer the property. Similar issues could also arise with the discovery of a previously unknown will.
The most effective way to protect against these issues is to have the title examined. Buyers can also purchase title insurance to provide a level of financial protection.
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