A title search is a thorough review or examination of the public records that pertain to real property ownership and the rights/limitations of its use. All documents affecting the subject property are reviewed for accuracy, completeness and proper execution. Once the title search is completed, the results are provided to a title officer who makes a determination as to the insurability of title.
What Issues can a Title Search Reveal?
A title search can show any number of title defects, liens, and other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against buyers/sellers and any restrictions or conditions limiting the use of the land.
Are There any Issues a Title Search May Not Reveal?
Yes. There are some "hidden hazards" that even the most diligent title search may not reveal. For instance, a previous owner could have incorrectly stated his marital status resulting in a possible claim by his legal spouse. Other hidden hazards include fraud, forgery, defective deeds, mental incompetence, confusion due to similar or identical names, and clerical errors in the City/County land records. These defects can arise after you've purchased your home and can jeopardize your right to ownership in part or full.
What is a HUD-1 Settlement Statement?
This is a summary of the financial portion of the real estate transaction. The title company or closing agent is required to use the HUD-1 by the Department of Housing & Urban Development on virtually all one-family to four-family residential real estate transactions involving a lender. The statement will list the purchase price, loan amount, closing costs for the buyer and seller, and will show all sums being charged and disbursed to the parties involved. It also clearly summarizes the total amount due from the purchaser.