A home purchase is, without a doubt, one of the most important financial undertakings you can ever make. And given the legal, financial and personal implications of buying a home, you want to be certain that you get everything right “the first time.” This is where due diligence comes in.
One of the most important due diligence tasks you’ll need to undertake when investing in residential real estate is conducting a title search. At its most basic, a title search involves scrutinizing public records to establish the ownership of the property in which you are about to invest your hard-earned money. Here are a couple of things you want to pay extra attention to while conducting a title search on a property.
The ownership of the property
Simply put, you cannot purchase property that is the subject of an ownership dispute. Property ownership disputes can take many forms – from missing co-owners to documentation issues. It is crucial that you are absolutely certain whom you are getting into business with.
Issues with the public records
Filing or clerical errors are not uncommon. Their existence can negatively impact a potential transaction. Simple errors like unclear figures, missing signatures or other paperwork errors can derail a transaction. A thorough search will help you reveal these issues and help avoid disputes that might impact your purchase.
Restrictions on the property
Liens on the property like easements, surveys and boundary disputes can cause problems if left unsettled. Also, be sure to check out the building bylaws so you can understand any restrictions and allowances that will control any future developments on the property.
If you are looking to invest in real estate, it is important that take proactive and informed steps to ensure that the process runs as smoothly as possible.