Things to Look For in Your Real Estate Title

If you’re in the process of buying or selling a home, you may have already heard quite a bit about the property title. If you’re lucky, the title is clear and your transaction will close with no problems. A real estate title with issues, however, may have hefty financial consequences for the owner of the property.

In this article, we’ll point out some of the more important questions every current or prospective homeowner should ask about their title. As a New York title insurance company with over 50 years of experience, ANSTitle has helped thousands of property owners understand what’s going on with their titles. But first, let’s demystify the concept of property title itself.

The Concept of Title Explained

In real estate, the term ‘title’ signifies the legal ownership of a particular property. Whoever holds the title to a home or another building is the only legal owner who has the rights to modify or sell that real estate asset. When a property is sold, the transfer of title from the seller (or grantor) to the buyer (or grantee) is recorded in a legal document called a deed.

The deed contains a lot of information about the property and its owners and it is a great start for those looking to research the title of a property. Below, we’ll discuss in more detail some of the main things you would want to look for in your real estate title.

Are the Correct Owners Listed?

First and foremost, you would want to ensure that the title is held by the rightful owners. Whether a sole person, a married couple, or a larger group of individuals, each owner’s name should be listed on the deed. It is also important to ensure that everyone’s name matches their government-issued ID.

Is the Legal Description Accurate?

Official documents such as deeds reference properties by their legal description rather than address. The legal description denotes the exact location of the real estate parcel in question by describing its boundaries, easements, and other geographic features. When purchasing a home, it’s important to ensure that the ownership of the correct property is being transferred and the best way to do so is to use the legal description from the most recent deed to the property.

It is not uncommon, however, for errors to occur during the surveying of the property or the recording of the sale. This can result in an erroneous legal description and the issue would be considered a defect on the title that would need to be corrected.

Is the Appropriate Type of Real Estate Title Used?

There are several types of titles and each defines different ownership interests in a real estate asset. Understanding the considerations of each is the first step in ensuring you are holding the right type of property title in your scenario.

Sole Ownership

As the name suggests, this type of title grants ownership to a sole individual. 

Joint Tenancy

In this type of ownership, two or more individuals purchase a property together and own equal shares of it. This is the title most commonly used by spouses purchasing a home. If one owner dies, the remaining parties take full ownership of the property without having to go through probate court. 

Tenancy in Common

This type of title also allows for multiple owners, however, each party has the right to sell their interest independently or pass the ownership to a beneficiary of their choice upon their death. For example, older individuals in second marriages may choose the tenancy in common title when purchasing a home, which would allow each partner to will their part of the property to their own heirs. 

Tenants by Entirety

Another ownership option for married couples is the tenants by entirety title. It allows each party to sell their share, however, they need the consent of the other party to do so. If one owner dies, the other automatically receives full ownership rights. 

Entities such as corporations, partnerships, and trusts can also hold the title to real estate assets, however, the above title types are most commonly used for homeownership.

Is Your Real Estate Title Clear?

Outstanding claims and various other issues with your title may end up costing you a lot of money or even your ownership of the home. Also known as defects, some of the most common title problems include:

• Contractor’s liens – money owed by you or a previous owner to general contractors or other vendors that completed work on the property.

• Property tax liens – a lien against your property can also be issued for unpaid property taxes. The local tax authority can take and auction your property to satisfy the outstanding tax bill.

• Easements and encumbrances – these could be any issues caused by the right of others to use your property in some manner or by encroachments such as improperly placed fences, sheds, or other buildings.
• Boundary disputes – survey errors and incorrect legal descriptions can result in costly boundary disputes with neighbors.
• Falsified documents – if illegitimate parties used fake documents in a past transaction, your current ownership of the property may be affected.
• Unknown heirs or wills – it is not uncommon for rightful heirs to appear years after a home sale with ownership claims towards a part or all of the property.

Should I Get a Title Report?

While you can verify a lot of title details on your own, the best way to have all these questions about your title answered is to obtain a title report of your property. Title insurance agents can conduct extensive title searches and alert you to any existing issues that may jeopardize your ownership and transfer rights.

Additionally, you can purchase title insurance that guarantees your title against any claims or other defects that were missed or unknown at the time of the title search.

If you’re looking for title insurance in New York or New Jersey, ANSTitle can help. We also offer settlement, escrow, and recording services, and can handle closings in all 50 states.