Title Problems at Closing In California

What is a Professional Title Search?

A title search checks documents and public records to make sure the house’s title is clear of any hidden debts, disputes, mistakes in legal descriptions, or other problems that could stop a sale. It also confirms someone’s legal ownership of a property.

Usually, you’ll need a full title search done when a mortgage lender asks for it to make sure the house, they’re lending money for can be sold without issues. Basically, a title search is necessary to safeguard both the buyer and the lender.

Title Companies

Title companies typically conduct a title search for the buyer or lender, allowing the seller to resolve any title problems.

A title abstractor or officer employed by the title company is responsible for examining land and property records to confirm ownership, identify issues, and potentially resolve them.

Abstractors communicate with lenders, agents, and other legal entities linked to the property and produce a preliminary title report. They investigate court judgments, previous deeds impacting property rights, tax records, settled mortgages, and more.

Title Insurance

Another role of title companies is encouraging buyers to purchase a title insurance policy that protects them from conflicts that can be traced to the property’s previous owner. They provide the homeowner with a copy of the Title Commitment, which discusses what is included when they purchase title insurance.

Common Title Issues at Closing In California

Title problems, also known as title clouds or title defects, are issues that must be fixed for a home sale to happen. Typically, these problems fit into two groups—fraud and errors.

Public Record Errors

Unclear Boundaries or Survey Errors

Easements

Liens

Unknown or Missing Heirs

Title Fraud and Forgery Issues

Encroachment Issues

Illegal Deeds

Undiscovered Will

How to Resolve Title Issues In California

Curious about fixing title problems for a clean title? 

Usually, the initial move in handling title issues is spotting them. This will aid in grasping and managing the situation. Then, you should collaborate with experts who specialize in the legal aspects of these problems.

For further assistance, here are three suggestions for dealing with title issues that may be useful.

Work with a Title Company

As mentioned before, title companies uncover deed problems and offer title insurance. After identifying issues, they advise on what to do next. They may propose straightforward fixes such as clearing debts or advise consulting a real estate lawyer if you weren’t aware of title defects. Typically, buyers select the title company for property deals. However, if you wish to address issues early, you can hire one, keeping in mind these factors:

• Reputation: Since the title company will coordinate perhaps the biggest sale of your life, you must ensure that they’re reputable. If you are searching online, you’ll know they’re reputable if they have an easy-to-read and up to date website that contains the services they offer, their address, links to their pages on social media, as well as testimonials. You may also check public records or Google and Yelp reviews to see if they have successfully helped resolve title issues before.
• Office Location: When fixing title issues, the title company should be proactive. This would be possible if their company quarters are near you or if they have a satellite office in your area. If they are really far, they should be willing to send their abstractor or agent to your location.

Despite being your number one go-to in terms of title issues, the title company can only do so much. In most cases, you’re the only one that can resolve the clouds on your home title.

Hire a Real Estate Attorney In California

While it may cost you a bit to enlist a real estate attorney or closing attorney, sorting out title problems with their assistance can be quick and straightforward. They can aid in fixing mistakes in the official records by re-filing the deed. Additionally, they can resolve disputes over property boundaries or ownership, and handle contested wills or liens.
To clarify, real estate attorneys can assist with various types of liens like child support, mechanics, state tax, or those related to mortgage loans.

Involve Your Licensed Real Estate Agent In California

Lots of sellers don’t tell their agents about title problems, worried it’ll slow down selling the property. While the concern makes sense, it’s best to avoid it altogether. Keep in mind, real estate agents are experts. They’ve likely handled similar situations and can help you out. They know what title insurance covers and can advise you accordingly.

Take Charge of Issues You Can Solve on Your Own

Title problems can often be fixed without hiring pros. This saves time and money when you change ownership of your property.
For example, if a title search finds a lien on your property, reach out to the lien holder and ask for proof of the debt. Then, discuss a payment plan. If you’re having boundary issues with neighbors, consider buying the part of their land you’ve encroached on. If there’s confusion among heirs causing a title cloud, consider signing a quitclaim deed. This removes ownership without guarantees.

Do Cash Buyers Purchase Houses with
Title Issues In California?

Yes. Cash buyers purchase houses with title issues because they can wait for them to be resolved. There is a smaller chance that a real estate transaction will fall through when you sell to a cash buyer, even if your house has title issues.

But it’s key to remember that if a lien pops up during the title search, it could impact the cash offer.

For example, if the debt exceeds the house’s offer, the cash buyer may not be able to cough up more to seal the deal. Basically, the cash offer would just cover the lien and may not cover it all. This applies to regular buyers too.

Final Thoughts: Title Problems at Closing In California