What is a title search and what are they searching for?
A title search is a search of the records of a county / regional clerk’s or recorder’s office regarding all activity / transactions pertaining to a specific piece of property. The title searcher or abstractor will review all transactions (sales, mortgages, liens) on a parcel of property from a specific point of time in the past to current date. They will compile the data found into an abstract of title, from which a report of title will be made for title insurance purposes. Typically, the title search will encompass all transactions recorded from the current date back in time, covering a period of 40-120 years, pending the requirements of the state /region you reside in.
The title search is conducted to determine that there is clear title to the land. Specifically, that the current owner has 100% title to the property subject to any easements and can convey or mortgage the property without complication. They will search the deed, mortgage, judgment and lien indexes for problems regarding the chain of title or for encumbrances to the parcel. The title search will show any party who has an interest in the property, who has a mortgage or lien and the position of the lien as well. Simply put; If you are a buyer, you want to know that when you buy the property, that you are the sole owner, and that the seller actually owns the property, and can convey it to you. That is one of the main reasons for the title search.
When you buy a home, you want to have clear and marketable title to it. That means that you can sell it without any issues. A title search is done to make sure you receive clear and marketable title from the seller.
Any liens such as mortgages, mechanic liens, municipal liens, etc are catalogued and need to be staisfied at or before closing. If these do not get cleared, they go with the property. And that means you get them. And that could be a breach of the mortgage if it is a priority lien. Usually, an attorney or an abstractor will search the registry records for any activity on a specific property for a period of not less than 40 years. You are presented with a title opinion or abstract of title that shows chain of ownership and provides a detail listing of liens to be satisfied.
There also may be permitting issues uncovered by a title search and the seller needs to clear those in order to comply with the terms of your purchase contract. Title insurance is required by most lenders and you can get an owner policy as well.