As a title agent, you play a crucial job in preparing and issuing title insurance for your clients. Whether you’re new to the title industry or looking for a refresher on the basics of title searches, use this post to learn more about the process involved in performing a title search as well as its role in issuing a title policy.
What is a title search?
A title search, also known as a title exam, involves examining public records to compile the chain of title for a piece of property and identify any title issues that may result in a non-marketable title. If the title company identifies ownership issues during the title search, they will work to fix these issues to ensure a clear title by closing day.
Who does a title search?
A person performing a title search is sometimes known as a title searcher or a title abstractor. This person is typically a title agent from a title company or an attorney from a real estate law firm. Title searches are usually performed by or on behalf of a title insurer as a preparatory step for issuing the commitment and subsequent policies. The title search process is used to confirm property ownership and verify an accurate legal description. A title search also identifies any claims, liens, or judgments that may impact the rightful ownership or lien position.
The typical title search process
During a title search, a title searcher reviews public records and, in some cases, court records available on a particular property. This process is used to confirm that the seller—the property’s current owner—is the rightful owner. In addition to ownership, the title search also identifies any claims on the property that could impact ownership rights. A title search generally involves the following steps:
- Retrieving the current owner’s name. To begin a title search, the searcher often starts with an owner’s name who appears somewhere in the chain of title. They will use this name to research the chain of title. If no name is provided, the title searcher can rely on the parcel ID, legal description, or street address to retrieve the name of someone in the chain.
- Constructing the chain of title. Once the searcher has the owner’s name, they will build the chain of title using public records from the recorder’s office. Depending on the state, the searcher may perform a search that goes back to the last insured transaction. For other states, they may search back to either the original abstract or original grant.
- Researching current and former owners. When the searcher has an initial chain of title, they will then research each owner and former owner to collect information on mortgages, liens, judgments, legal descriptions, and other relevant records.
- Investigating any title issues identified during the search. According to ALTA, very few chains of title are perfect. During a title search, the searcher may find apparent breaks in the title. In this case, they will need to do further research to find if a title issue is truly a break in the chain of title. This research may involve collecting public records and, sometimes, court records from a Title Plant to search within a Geographic Index and Name Index for additional information.
- Finalizing the chain of title. When finalizing the chain of title, an examiner often reviews the title search. Some title insurers will call their examiners abstractors due to regional terminology preferences. This person analyzes each instrument in the chain of title to collect essential details pertaining to ownership of the property and its impact on the title.
- Delivering the results of the title search. Depending on regional practices, the title searcher may deliver the results of the search in the form of an opinion, certificate, cover letter, basic report, or abstractor notes. Any title issues that were not able to be resolved will be listed and subsequently included as either requirements or exceptions on the title commitment.
Take ALTA’s Title 101 course to learn more about title searches and other basic principles of the land title industry.
How long does a title search take?
When a title searcher has access to all the records they need, a title search can take anywhere from a few hours to a few weeks to complete. When determining how long a title search may take, here are some factors to consider:
- Complexity of the documents. The time it takes to complete a title search depends on the complexity of the documents related to a property’s chain of title. More complex documents can take longer to review and any inaccuracies in the documents can prolong the title search process.
- Record availability. If the records on a certain property are not readily available or accessible, it may delay the title search.
- Age of the home or the time since the home was last insured. Older homes with multiple previous owners will often have more documents to review compared to newer homes. Additionally, if it has been a while since the home was last insured, it may extend the time needed to conduct the title search.
- Communication with multiple recorder’s offices. A title search may involve collecting records from multiple offices, so this factor can also delay the process.
Title searches and title insurance
The title search is one of the first steps in issuing title insurance. Title insurance protects the buyer and the lender from claims that may arise after a home is purchased or mortgaged. The title search is a key part of creating the title commitment and title policy. This policy outlines the risks covered by title insurance as well as any exceptions and exclusions that are not included in the coverage.
Gaining expertise on regional nuances can help you successfully navigate the title search process to provide timely and accurate documentation for your clients. Leveraging technology with title and escrow software can also help streamline title operations and securely store documents.
As the title industry continues to grow, new title agents can make an impact by managing real estate transactions and providing clients with peace of mind throughout the closing process. If you are new to the industry or considering a career in title, use our online training course to take your title knowledge to the next level.