What is Title Search? How Does it Work?

Purchasing a home comes with a lot of hurdles. You need to arrange the necessary financing, the house needs to be professionally inspected and appraised, and you need a title search to ensure that you can legally own the property.

What is Title Search?

A title search is an examination of public records and other documentation of a property to ensure that it is legally able to be sold, and its title is free of any claims, liens, or other issues that could jeopardize your ability to legally own the property. This process is typically done by a professional title company or an attorney.

How Titles Search Works

A title search is done on behalf of a prospective buyer who is interested in making an offer on the property. The process may also be initiated by a lender or some other entity who wants to verify the ownership of a property, as title searches determine what claims or judgments may exist against the property before approving a loan or other credit that uses that property as collateral.

When performing a title search, the attorney or the title company will conduct research using public records and legal documents to identify the vested owner, liens, or other judgments on the property, the taxes due, and any outstanding loans on the property. 

Cost of Title Services

Title searches that are conducted by a title company or an attorney comes with two main costs

1.     Settlement Service Fee

These include costs incurred to close the home loan, such as the cost of wire fees, escrow and underwriting the title insurance company. These also include the fees for the title research and the costs to resolve any discovered issues. A title research often costs somewhere between $75 to $100, and can be paid either by the seller or the buyer if the parties agree.

2.     Title Insurance Premium

A title insurance premium ensures the person who is buying the house is the rightful and legal owner of the property. It is a one-time cost which is paid at the time of closing. The cost for a title insurance premium ranges between 0.5% to 1% of the purchase amount.

 Can I Do My Own Title Search?

While it is possible for a prospective buyer or any other interested individual to conduct a title search on their own, it is not recommended. Legal documents of a property can be confusing, and going through records at the courthouse can be really tricky. So, it is easy for an inexperienced person to overlook something important.