Are You Living in a House or a Garage?
When you are closing a transaction, there will normally be a $45 (or so) fee for a title search – and that can be very important as this Phoenix woman found out recently.
Clarina Bayliss purchased the building adjacent to the house she lived in until losing it to the bank. However, when she lost her home to foreclosure she moved into the building believing it was a single-family residence until the city of Phoenix notified her that the house was in fact was a garage.
What is a Title Search?
In short, it is basically where the title company – in the process of providing title insurance – will do a diligent search of the title to make sure that there are no claims against the title.
Would they have found this situation exactly?
Well, that depends on the contract and how the deal is written, etc. However, in Central Ohio the Columbus Board of REALTORS utilizes different contracts for different types of properties and a garage – which would either be considered as improved vacant land or commercial land would be on a different contract than residential real estate purchase contract. The property being listed as “x” by the city and listed as “y” on the contract should attract a red-flag by someone in the search.
But It Really Isn’t For That…
No matter what you think it is good to have a title company review the title of any property you are purchasing for possible issues.
Honestly, how often would you look at the “building” she bought and say that looks like a house?
Where the title search comes in very-handy is in making sure all the previous owner’s debts against the property have been satisfied and paid. In today’s economy of short sales and foreclosures this is a very important detail to make sure is handled.
An example…
You are buying a short sale and assume that because the first and second lender’s have been satisfied then all the lien holders have been satisfied. Well not so fast … there could be:
- Contractor Liens
- Unpaid Home Owner Association Dues
- Outstanding Water & Sewer Bills
- Tax Liens
And depending on the type of deed you receive at closing you may be on the hook for most – if not all – of these expenses. So next time you balk at a title search, remember the headache it could be saving you.
