The title search is a key part of the home purchase process because it verifies that the property has a clear, marketable title. This gives you and your mortgage lender the confidence that the property is free of legal issues or disputes in ownership before you purchase it.
Sometimes, the title search uncovers errors in the public records.
What types of public record errors are there?
Sometimes, public record errors result from human error, confusion or unclear information on the paperwork. Simple mistakes such as typos or misspellings in the owner’s name can lead to a mismatch between the records and the owner’s legal name.
Inaccuracies in the property description can also lead to complications. For example, incorrect listings for the boundary lines or the property acreage might cause legal complications in the transaction.
Another common error discovered in the title search is an unreleased lien. Any paid lien gets removed from the property record. If a lien still appears despite its resolution, this can potentially prevent the property sale until it gets resolved.
What are the consequences of errors in the public records?
When the title search uncovers an error, it can lead to delays in the transaction. Not only that, but you might incur additional legal and administrative costs to correct the problem.
In some cases, it can shake the buyer’s confidence in the transaction and cause the deal to fall through completely.
Title insurance helps to protect against financial losses from these types of complications and only costs between 0.5% and 1% of the purchase price, according to Forbes. Though a title search and insurance are optional in some cases, the information and peace of mind they provide can help.