When you buy a property, it’s all yours, right?
Well, if you buy a property with title defect—like a lien, levy, or encroachment—that might not be the case. If something goes down and you don’t have a clear title, legal ownership of the property could come into question, which means it could get repossessed. Major yikes.
As a buyer, you want to ensure that the property you’re buying has a clear title. Your real estate agent will work with a title company to make sure your title is good before you close.
But if for some reason the property you love doesn’t have a clear title, it’s in your best interest to say “see ya” and keep looking. Why? Your bank won’t pony up those dolla dolla bills for your mortgage unless the property has a clear title—it’s just too much of a risk for them otherwise.
If you want to sell or refi your property, you usually have to have a clear title. Make sure your title is free and clear by doing your due diligence and hiring a title company to do the search for you. Or, if you have a feeling your property has issues, hire a real estate attorney. An attorney will be able to walk you through the process of clearing your title if there are any defects on the title.
Moral of the story? Make sure the property has a clear title before you close and clear up any issues before you try to sell.
