Before a buyer closes on a home purchase, they’ll have a property title search done. A title search involves looking through public records to confirm that the seller really does have ownership and identify whether there are any outstanding claims or liens on the property. 

Buyers’ attorneys or title companies often conduct title searches, but lenders can undertake title searches as well. 

What happens during a title search?

The attorney, title company or other entity conducting the search will look through records and legal documents at places like your county courthouse and issue to the buyer a title report. The amount of time the process takes depends on the age of the home—the longer its history, the more potential issue may turn up—and can take up to a few weeks. Typically, a title search costs between $75 and $200. 

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If there are issues with the home on the title report, the buyer then discusses them with the seller—ideally with their attorney present—and decides whether or not to go through with the purchase. 

Buyers’ attorneys or title companies often conduct title searches. Photo: Pixabay

Because title searches won’t necessarily turn up every claim or lien on a home, it’s recommended that buyers take out title insurance. This is a policy that protects the buyer in case they discover any outstanding issues after they close on the property; the title company in these cases will take on the expense of resolving the problems. The cost of title insurance depends on the home’s purchase price; a buyer’s real estate attorney can help them decide which title company to work with. 

Some buyers are required to take out title insurance—like, for instance, buyers of New York City condos—but for others it is optional. For buyers who are financing their purchase, lenders usually require that they take out a lender’s title insurance policy; this protects the lender only, so these buyers may also want to take out an owner’s policy. 

What might a title search find? 

The title search will look for issues with anyone from the chain of title—that is, anyone who owned the property. Problems can include unpaid taxes, zoning law violations, lawsuits against the property, errors or forgeries in legal documents and outstanding liens. 

There are different types of liens—legal rights or claims against a property—and the existence of one is not necessarily a red flag. A mortgage is considered a voluntary lien, for instance, and if the seller hasn’t finished paying off their mortgage, that should not be a concern for the buyer. 

Other types of liens, though, may dissuade buyers from purchasing. A judgment lien means that a creditor has successfully sued the homeowner in court and has the right to possession of a piece of the property if the homeowner does not repay their debts. A mechanic’s lien means the seller has failed to pay for work done on their home. 

In a worst-case scenario, liens like these that go unaddressed can lead to foreclosure on the home, so a buyer must make sure the seller resolves these unpaid debts so that they are free and clear of any judgments when they purchase the home.