What is a Property Title Search? - Definition & Importance

Instructor: Racquel Fulton

Racquel is a Real Estate Licensee and holds a New Jersey Title Insurance Producer Certification

In real estate there are risks associated with ownership rights in the title to property. Learn how title searches are performed to disclose potential liabilities. Take a quiz after the lesson to test your knowledge.

The Search Begins

Leah is purchasing a house from Dave. Leah asks Dave if there are any outstanding debts against his property. Dave assures her that the property is free and clear of any liabilities. To verify if Dave's statement is true, Leah orders a title search. In this lesson, you will learn what a title search is and how it is performed.

Title Searches Defined

In the field of real estate, a title represents a group of rights that belong to the property's owner. Rights within a title can include the right to live in, lease or sell a home. A deed is a legal document that transfers the rights to the title from one owner to the next. Those rights can become hindered by liabilities caused by a current or former owner. These types of liabilities are called encumbrances. Encumbrances include liens, taxes and unpaid mortgages on real property. They are listed in legal documents which are filed in courthouses and recorders' offices.

To return to our example, suppose Leah is obtaining a mortgage loan to finance the purchase of the property she wants to buy from Dave. Both Leah and her mortgage lender will obtain a title insurance policy. The policy will protect their rights to the title. This type of real estate transaction will generally require a full title search.

Although title deeds are public records and can be accessed by anyone, professional title searchers are skilled at locating and organizing specific information required for different types of real estate transactions. To conduct a full or current owner title search, a searcher will typically locate the following public records:

  • Court Dockets - When a lawsuit, judgment or lien is filed, the searcher will find court records of encumbrances or pending lawsuits that may become encumbrances.
  • Mortgages - Many people purchase real estate through financing provided by mortgage lenders. A mortgage is a voluntary lien against the title to a property. Searchers look for mortgages that have not been paid back in full (or satisfied).
  • Marriage Licenses and Divorce Decrees - The names appearing on a title can change through marriage, divorce or court order. Marriage licenses and divorce decrees will provide proof of name changes affecting the rights of a marital property.
  • Death Certificates and Estate Filings - If a property owner passed away and the title was transferred through an estate, a search will obtain proof of death or an estate filing.
  • Domestic Relations - In recent years, many states have enacted legislation that automatically places a lien against real estate and personal property of persons who owe delinquent child support obligations.
  • Chain of Title - A chain of title is a historical account of every owner of a specific property. A chain is created each time a deed to the property is recorded. As an example: Dave purchased the property and received a deed from Mary. Mary purchased the property and received a deed from Lee. Lee purchased the property and received a deed from George. Each deed represents a link in the chain of title. When a deed is incorrect or missing it causes a break in the chain.
  • Cloud on Title - When the chain of title is broken it is called a cloud on the title. When a cloud on the title exists it causes a risk to current and future owners of the property because title insurance companies will not want to defend the title against losses. When problems like this arise they are usually handled by a quiet title action. A quiet title action is a legal proceeding that repairs a broken chain of title through a decision by the court.

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