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Should you always perform a land title search when buying a home?

If you’re investing in a new home then you really want to know exactly what it is you are buying, are you getting what you think you’re getting. A land title search helps to establish this; if you don’t conduct a land title search you could potentially be taking a major financial risk.

For most people a home is the biggest financial investment they will ever make. That’s why it’s so important to make sure that this investment is as secure as it can be; you don’t want to be stung by any unpleasant surprises after you have a signed the contract to purchase.

What exactly will a land title search tell you?

There are two types of land title search; a full coverage search and a limited coverage search. The former is usually carried out when a home is being sold, or when someone is purchasing land for construction. The latter is more normally carried out when someone is looking to re-finance on a property they already own.

  • Full coverage search

If you are buying a home then the safest option is to conduct this type of land title search; the results will tell you about:

  • Liens against the property and the seller.
  • Conditions and restrictions.
  • Ordinance issues.
  • Confirmation of the seller’s saleable interest in the property.
  • Limited coverage search

This is usually used if you are looking to secure additional finance on your existing home and the results include details of liens against you and against the property.

If you’re buying a home you can see how useful it is to know the results of a land title search, so that you know of any potential problems there may be associated with buying the property. Most land title searches are completed before signing of contracts, or during the escrow process. If you’re buying a house you can also invest in extra protection, by purchasing title insurance.

What is title insurance?

Title insurance was developed as a result of a perceived deficiency in the standard of land title records in the US. The last thing you need if you’re buying a new home is the chance that you might be subject to financial difficulties should a problem with the title be identified. If you purchase title insurance it protects you and any mortgage lender from such financial problems. When you’re making such a major investment, title insurance is definitely something you may wish to think about.

All land title documents are kept in hard copy in local records offices. They are open to public examination so anyone can get access. There are also many companies online who are in the business of conducting land title searches. It’s easy to conduct a search and it could save you money in the long run. If you still have any lingering doubts then you can also invest in the safeguard of title insurance, just in case.

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