How does a Real Estate Property Title Function?

A real estate property title is a document that provides evidence of ownership of a piece of land or property. A clear title is a title in which the ownership is clearly identifiable, while a cloudy title indicates that there may be more than one claim to a particular property. A cloud on title can also mean that there are unresolved issues regarding the property, like a mechanic’s lien or contractor’s liens.

Before completing a real estate transaction, a title search is typically required to insure that the property you are purchasing or selling has a clear title. Within the title document will be a chain of title that shows each transfer of the property ownership. The transfer of ownership will be for at least 24 months, but can sometimes be traced back further.

While the title search may be expensive, it is one of the most important steps in the purchase process. Without knowing that you have clear ownership of the property, you should never complete a purchase transaction. Often, cloudy or defective title issues are easy to resolve. Many times, the mortgage company has simply failed to report the payoff of the lien. However, without a complete title search done by a competent and experienced real estate lawyer, your investment in the property may be at risk.

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