Jennifer Fagan, Realtor® here, and I’d like to talk about something I get asked an awful lot: What on earth is a title search and why is it so important?
I always tell my buyers to get a title search, and get title insurance. It’s as important in Louisiana as flood insurance.
What a title search does is that it confirms that what you think you’re buying is what you’re buying, and it also allows you to protect your investment. Again, this is one of the most important things that you can do, and let me give you an example of why it can be such an important step:
Imagine that the house that you’re buying has an owner who has been negligent in paying back alimony. He hasn’t made a single payment in years, and his ex-wife is taking him to court over the entire amount that is owed. Part of what was supposed to be paid years ago was a part of the house. In certain complicated situations, the judgement may have been issued before you bought your house, and this could still apply and override your contract. In other words, someone may have sold you something that did not belong to them. This also could be true for a home that was acquired illegally in the first place. It may have been sold to you on the straight and narrow, but that doesn’t undo what happened before. In other words, just because you bought the house doesn’t mean you’re the rightful one in the eyes of the law
In another likely scenario— the home you’re buying could have belonged to someone who has passed away, or who had heirs that the courts did not know about that are now trying to lay claim to the property. This could be a child or grandchild, or a distant relative that may have lived far away. This is something that happens more and more frequently in a post-Katrina Louisiana. Especially with all of the tax sales that happened due to high percentage of people who left their homes in 2005 and never came back.
Opening title on your potential home is the best thing that you can do to protect your investment, and it’s a necessary step in the home-buying process. The title company will work diligently using whatever public records they have at their disposal to trace back the history of the home, starting from when it was built, and going through each and every owner along the way. They’ll make sure each sale was done correctly and to the letter of the law, and most importantly— will verify that you are indeed the rightful owner.
Once the title search has come back “clear”, you’ll get the okay to go close on the home, but please don’t neglect to buy title insurance. What title insurance protects you from is mistakes that the title company may or may not have made in their search. Think of this as similar to the extra little insurance you buy when an accountant does your taxes, just in case you get audited. If someone down the line ever claims a problem with the title, and comes to seize your property, your contract will be rendered null and void, but you’ll get all of your money back. You won’t end up with the home in this case, but at least you won’t be out any money, which is extremely important when it comes to a six-figure investment.
For any additional real estate questions, feel free to contact me at any time! I’m always available to help you buy the home of your dreams or sell your current property so that you can set yourself up for the best future possible. I’ll be with you every single step of the way so that everything gets done correctly.
For Results & Not Excuses,
Jennifer Fagan, Realtor ®