Bidding for real estate can be exciting, particularly if it’s for your new home. However, it’s important that prospective buyers do not become lost in the moment (which can happen) and forget about all the legal details.
The money put down for a house is typically the most significant purchase an individual or family will ever make, so due diligence is crucial. One thing that is certainly worth carrying out is a title search. But what can this tell you?
Whether there are outstanding debts
For some loans, particularly mortgages, it is normal for the house to be put up as collateral in case of defaulted payments. This is something that you really need to know about before making a purchase. Fortunately, a title search can provide this information. You’ll be able to find out if there are liens on the home. Not doing this could mean that you buy a property with debts still outstanding against it, meaning that you could possibly be held liable for repayments.
Whether the ownership is clear
While most real estate transactions go through relatively smoothly, some of them can become very complex. While you may take the seller at their word, everything may not be as it first appeared. For example, an unknown heir may have an ownership claim to the property, which means that the buyer you are dealing with doesn’t have the authority to make the sale. Thus, the whole deal might be void.
A title search is a fundamental part of the due diligence that should be conducted before a real estate transaction. Having legal guidance behind you can help ensure that you don’t fall into any traps.