To learn what “title” is and why a title search is needed, see blog 1-A by clicking here.
Doing a title search is a complex process that requires substantial knowledge and experience if it is to be used for a transaction (purchase or refinance of real estate). If you’re just seeking information, ok, have at it. Here is what you need to know:
Search length – How far back in a property’s record one needs to search depends on the purpose of the search (goal) and the state’s statute of limitations. If you are required to search back in time before the county began digitizing records, you will then have to sift through large books.
How is a search performed?
A professional searcher (abstractor) gets onto the county recorder’s computer system – Some recorders’ offices charge online subscription fees, some are free, some limit subscriptions to local firms, and some require you to walk into their office to access records.
- Scroll back the requisite number of years, then work backwards to present day.
- Write down each doc of record, with Book/Page/Instrument#, parties, etc.
- Cross off each that is expired or that you find a release recorded for, so all that is left are valid liens upon the search’s conclusion.
- Deeds/Wills – Write a deed chain (list) and verify that each party that took an interest as buyers, released their interest on the next deed as sellers. Close gaps by investigating deaths, divorce, probate documents, etc.
- Legal description – Correctly identify it. Not an address.
- Judgments – Search names of all buyers and sellers in court records for judgments against them. They can instantly attach to all property owned by the subject in that county. Ex: If a judge awards a $50,000 judgment against Joe as result of a court case, the judgment instantly attaches to all real estate Joe owns in that county. Joe cannot sell or refinance any of that real estate unless he satisfies the judgment.
- Taxes – Check with the county tax assessor to find the property’s tax payment status.
- Add all the above into a report and attach copies of all docs listed.
How much does a title search cost and how long do they take to complete?
Costs of residential searches (property zoned for 1-4 family homes) are easier, less complex, have fewer documents to sift through and their legal descriptions are very simple – platted with lot and block (a sentence or two.) Residential searches have set fees for each search length, county, and state. Accessibility of county records is a factor in these fees – online or in-person, and how rural the recorder’s office is if in-person searches are required. These typically take 1-3 days to complete, and the fees range from $75-$150, plus copies fees.
Common search lengths
- Current Owner (aka O&E, Owner & Encumbrance, 1-Deed) – used for refinances.
- Two Owner (aka 2-deed) – Rarely used.
- Full Search – Ranges from 30-60 years based on the state’s statute of limitations). Used for residential purchases.
- 60-year – common for commercial property purchases
- Patent – used for high-cost developments. Searches back to the date that the US government either granted or sold the property to the first private owner.
Costs of commercial searches (any property that is not residential) are typically more difficult;
- there are usually more documents to sift through
- the search lengths are typically longer
- Rural/farm property’s legal descriptions are typically by metes and bounds (paragraphs or pages in length.) Identifying an accurate legal description can be time-consuming as one must find the parent tract and subtract all legal descriptions of all prior out-sales.
- Accessibility of the county records is a factor as well – Are they online or is an in-person visit required? How rural is that recorder’s office and how much travel is required?
- Turn times for commercial searches typically range from 5-14 days.
- As a result of all the above, commercial searches must be priced by quote. Quotes take 1-3 days and final quotes typically range between $300 and $1,500 plus copies fees.
Key knowledge and skills required for performing a title search: Close gaps in deed chains. Deed types. Identify ownership-transferring docs that are not deeds. Statutes of limitation. Marital property rights. Accurately identify the remaining legal description when there have been multiple out-sales from parent parcel. Arms-length transactions, etc.
Conclusion
Ensure you use a highly reputable and professional abstractor, search vendor, title/escrow company, or title insurance company to perform your search. This is so that the search can be used for you to be able to purchase a title insurance policy on the property.
Individuals, Foreclosure firms, Tax lien investors, Renewable energy developers, and Commercial real estate attorneys require search vendors that carry substantial errors & omissions insurance coverage, are SOC-1 and SOC-2 certified, or are used by national title insurance companies daily. Title Leader’s marketplace has all these providers in its marketplace: Leading national title search vendors, title insurance companies, and title/escrow companies.