A real estate purchase agreement is not the last step before a closing occurs. The property should undergo inspections and an appraisal . The borrower has to finalize their mortgage. They also need to obtain a title insurance policy.
Sometimes real estate transactions end up delayed or outright canceled because the title search process required to obtain title insurance turns up with surprise issues with the title records for the property. A former spouse or a deceased person might show up on record. Liens that the owner paid could still be in place. Such title blemishes can prevent the title company from issuing a policy and could have a major impact on the scheduled closing.
How can sellers resolve surprise title issues without canceling a real estate transaction?
Executing new deeds
In many cases, the title insurance company can draft deeds as part of the title curative process. A quitclaim deed signed by a former spouse can be adequate to remove their name from the title records and proceed with the closing as scheduled.
Submitting proof of lien fulfillment or the death of a co-owner to the county recorder’s office can also lead to the correction of title records. With the right support, such as hiring an attorney who specializes in real estate law, it is often possible to clear title blemishes with routine documentation.
Initiating quiet title proceedings
Occasionally, a party with a lien or their name on title may not cooperate with the title correction process. Other times, the seller may not be able to contact the other party in a timely manner.
When there are title issues that sellers cannot resolve with a deed, they may need to take the matter to court. A judge can review documentation and can help correct inaccurate title records. Successful quiet title proceedings can result in an update of the records maintained by the county recorder’s office and can help sellers move forward with a planned transaction.
Title issues can have a major impact on a residential real estate transaction. Before listing real property, you should conduct a title search. To address any title issues that show up, you should find an attorney who specializes in real estate law that can resolve those issues and ensure a successful closing.
