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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
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- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Abstract of Title in Real Estate
When you buy a piece of property, and the period between contract and closing, there are a lot of things that are done to ensure that the new buyer is getting a property according to his expectations.
One of the processes which are included in between this signing a contract and closing is title research or an abstract of the title.
In this post, we will understand what is the abstract of the title in detail.
What Is An Abstract Of The Title?
An abstract of title is a written statement of title deeds and documents that proves the owner’s right to transfer title to the buyer.
The abstract of title includes the history of the owners, liens, mortgages, any filings against the property, deeds, easements, judgments, etc. most of which is public record information.
When the owner is selling his home the abstract of the title is required to be updated.
How Is An Abstract Of A Title Obtained And Processed?
A title abstract starts by first identifying the property to be searched. It may seem like a small step however if you have a street address, you want to make sure that the legal records you are looking at match that street address.
The street address is normally only used by the post office to identify where to bring the mail. It is not something that a legal description of the property or the title records.
Once you have that established, then the title company will go inside the land records it could be the county courthouse, it could be the deed recorder or it could be the civil court records, the title company have to go to all of those places.
On most properties, there could be five or six sources they need to physically visit to get the documents to create a title.
It could be deeds, mortgages, liens, easements, restrictions, assignments, releases, mineral rights, and any type of records that would be found in multiple places.
So the title company has to run an index into each one of those places to find all the documents that go with the owner of that property.
Once you have the name index run then you retrieve all those pieces of paper from the books, microfilms, deed books, and possibly from archives from the history of that property.
Some of them may be paid off some may be assigned, however, that will come later.
The first thing the title company will do is retrieve all of those and collect them into a folder and the title examiner who is performing this search will go outside of court and analyze them which is called an abstract of title in real estate.
The examiner will be going through each of these documents to see is it still an open document and if it has been paid off or cleared by another document.
They will also check if it has been abstracted previously so that a release goes with a mortgage to clear it off.
All these things are part of the abstracting analysis process which usually takes more time than accumulating the documents from various sources.
Once the examiner does that they create that certified abstract document which is shared with the title company and the mortgage lender.
Conclusion
When it comes to buying a new home all the parties involved including, the buyer, seller, and lender would require a clear title to avoid any surprises after closing on the property.
The title company will do an abstract of the title to ensure there are no outstanding liens, judgments, or any other legal obligations attached to the history of the property.
