Buying a home is a big step in many people’s lives. You may have saved for years to get to this point, and now you want to purchase the perfect property for you and your family.
While this should be an exciting and even fun moment in your life, it can be a risk to your financial stability. That’s why you want to be sure that the title of the property you’re looking into buying is clear and doesn’t have any clouds.
A clouded title is simply a title that has some kind of problem with it. It might have a lien against it, for example, or there could be a question about who really owns the property. It’s in your best interests to ask the seller to resolve a title cloud before you buy a home, or else you could end up in a difficult position later on.
When will you find out if a property has a clouded title?
You should find out when you do a title search. A title search usually happens during the closing process, which means you will have already made an offer on the home and had that offer accepted. The frustrating thing about having the title search at that time is that you’re already emotionally invested in the purchase.
You may want to talk to your attorney about performing the title search sooner. You could do it before closing if you think there is something off about the purchase or that the seller may be trying to conceal something.
What happens if something is missed and a cloud appears later?
The good news is that even if your property title search misses something now, you can usually rely on title insurance to help cover any damages. However, some people make the mistake of waiving this insurance coverage. If you aren’t going to run a title search or one was run and appears to be clear, you should still have title insurance to make sure you’re covered if legal problems arise later due to errors during the title search.
If you’re dealing with title issues now, consider looking into your legal options. Depending on your circumstances, you may be able to quickly resolve a problem or unwind the sale.