Texas real estate purchases: why a title search?

If you are buying or selling property in El Paso, Texas, and you are not versed in real estate law, you probably don’t want to attempt to go it alone. Real estate procedures and laws can be very complex. Anyone who is not a first-time home buyer probably knows that there are tons of paperwork that must be signed when closing on a house or piece of property. Did you ever wonder what all that paperwork was about?

There are certain steps that must be done before closing on a new home or piece of property. Besides the normal home inspection that takes place to ensure the home is up to par, there is another inspection to be done — a title search. Most people assume just because the property is being sold, the title is free and clear, or will be transferred directly from the lender. Unfortunately, it is not always that simple. When a home is bought or sold, that is often the time when someone discovers additional liens or judgments exist on the property.

That is why a title search is performed. Some of the issues that may show up could be a second mortgage holder, a judgment against the home from an unpaid debtor and occasionally even an old lien on the property that was made against a previous owner could show up. To see additional issues you might run into with property titles, click on our website.

You should also be aware of laws regarding property titles in your state. Different states have different laws regarding how titles are handled by mortgage companies, such as whether your state is a lien theory state or a title theory state. Texas is a title theory state, where a lender holds the title to a borrower’s property in a Deed of Trust. In a lien theory state, the borrower holds the title, and the lender has a lien against the title until the loan is paid.

Before moving forward to sell or purchase your home, you should ensure a thorough title search is done on your property. Everything must be handled properly, as even an incorrectly spelled name can create chaos or cause litigation down the road.