A title search tracks the title (ownership of the property) backwards in time. The title search ensures that the property you are being sold exists, is the tract of land you are interested in, that the person selling the property has the right to sell it, and that if you buy the property you will become the real owner of the land. Although a title search isn't always a requirement when purchasing a property, it is almost always a wise investment.
The information that a title search gives you may sound intuitive. Surely, you may think, if you buy a property, you become the real owner of the land. However, landowners can, knowingly or unknowingly, sell you a tract of property which has already been sold to someone else or that has a lien or easement on it.
If a property has been bought in a tax sale and is being resold, then the current owners may not know exactly where the property is nor how large it is. You can find out all of this information in the title search.
You can also find out whether a property contains a lien or easement. A lien is placed upon a property if the owner has not paid a debt. If a property contains a lien, then the property can be seized by the person to whom the debt is owed. You would not want to purchase a property which contained a lien.
Liens are filed separately from the deed. You will need to check in two places in the county courthouse for a lien on the property. First, check to make sure that the property taxes have been paid. Then check in the judgments books to make sure that there have been no judgments placed against the property's owners.
A property may also have an easement on it. An easement is concerned with ways in which the property may be used. Most properties will have utility easements over portions of the property, meaning that the utility company has the right to come onto the property and maintain the utility lines there. You should not be overly concerned with this type of easement, though you will want to know the location of the utility lines.
On some properties, previous owners may have sold their minerals rights to a mining or drilling company. You probably do not want to buy a property on which the mineral rights have been sold.
Other properties may have conservation easements placed on them. A conservation easement means that a previous owner has sold or given away certain rights to the property, such as cutting down trees or developing the land. These rights are usually held by an organization, such as The Nature Conservancy, which will make sure that future owners do not violate the terms of the conservation easement. Depending on how you plan to use the property, a conservation easement may or may not be a problem.
Conducting the Title Search
You can conduct a title search on your own. You should trace
the ownership of the property back over the last sixty years using the
deed books at the county courthouse. You
should also check any judgments which have been made against any of the
property owners to make sure that there is not a lien on the property.
You should make sure that none of the owners have sold part
or all of the property to anyone other than the current owner.
Many people prefer to hire a lawyer to conduct the title search. The title search process is tedious, especially for someone who has never done it before. Also, if you make a mistake or miss something, the fault and responsibilities are your own.
It is almost unheard of for a bank to lend money on land that has not had a title search and title insurance as well. The simplest way to fulfill this requirement is to hire someone to conduct a title search and write up a Condition of Title Report, which will generally cost somewhere between $150 and $200. The Condition of Title Report verifies that the title is clear as of the date on the report.
Alternatively, you can purchase title insurance. This is a more expensive proposition since the title company is not only verifying that the deed to the land is clear, they're also insuring the investment.