Common Title Issues in Residential Real Estate Sales

Common Title Issues in Residential Real Estate Sales

A clear title is a critical part of any residential real estate transaction. Simply put, clear title means that the seller has the legal right to pass on the property to the buyer.
To verify that a title is clear and free of “defects” or “clouds,” a title company or skilled real estate attorney does a title search. The attorney determines that the real estate title is legitimate, as well as in whom the title is vested, so the buyer can be confident that they are the real estate’s legal owner.

Common Issues Affecting Clear Title

The title search includes searching for potential issues that limit the seller’s ability to pass the title to the buyer. These include things like outstanding mortgages, judgments, restrictions and other encumbrances against the property that may affect ownership. Here are some of the most common issues residential real estate buyers encounter.

Mechanic’s Liens

Mechanic’s liens are liens placed against the property by a general contractor or someone else who has helped improve the property. Contractors place liens against the property to help ensure they get paid, and the lien is intended to be released when the job is complete. However, sometimes contractors fail to release the lien, either because of a paperwork error or because they were never paid. When a creditor has filed a lien on the home against a seller, it prevents the seller from selling the home.

Divorces and Family Disputes

Family dynamics can also cloud an otherwise clear title. For example, a couple purchases property together and then later divorces, the ex’s name sometimes remains on the deed. The ex’s name must be removed from the deed before the seller can pass title to the buyer.
Children who inherit a property can also cause title issues when not all of them agree to sell it. Your attorney can help negotiate the purchase with the remaining siblings who inherit a share of the property.
Finally, past due child support or spousal support can also lead to liens that prevent a seller from transferring property rights to the buyer.

Financial Issues

Financial issues can also prevent the transfer of clear title from a seller to a buyer. When a seller has failed to pay taxes, a lien can be placed on the property. The tax issues must be resolved before the sale is final.
Bankruptcy can also cloud a title. When the seller has been involved in bankruptcy proceedings, it may be necessary to petition the court to release the property from the bankruptcy process.

Contact an Experienced Real Estate Lawyer for Help

Any title issue discovered needs to be resolved so that the seller can pass clear title on to the buyer. That’s just one of the reasons it’s important to have an experienced real estate lawyer on your side.
Your lawyer can help you discover potential issues and resolve them quickly so that you can sell your home or purchase the home of your dreams without worry. To contact one of the real estate attorneys at the Lonergan Law Firm P.L.L.C. call 214-760-6768214-760-6768.

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