A title search is required for any and all real estate deals just to make sure there are no unexpected claims on the property. Before you go through the process of purchasing a property, you want a “clear title” — which means that the seller transferring the property is the rightful owner, and there are no other claims on the property. Why is this important? If there are other claims, be prepared for things to get complicated. “Title disputes can take years and thousands of dollars in legal expenses to resolve,” says appraiser Bourland. Title-related issues can include an illegal deed as well as missing heirs who turn up and claim the property. Title insurance is required in most transactions, thankfully, which will protect you. But it’s a red flag if a title company won’t provide title insurance for the property. Best to walk away in this case. “Sellers can only sell the rights to property they actually own, so if there are competing claims, those come with the house,” says Bieber. “You’ll inherit the easements, the creditor claims, and any other encumbrances. If there are problems like a boundary dispute, a weird easement granting access to a creepy neighbor, or a third party with a claim on the property, walk away. Otherwise, you could end up having to pay off someone else’s debt or watching your neighbor trudge through your yard as you sip your morning coffee.”
4. Work Has Been Done without a Permit
If you discover that work has been done on the property without a permit, that’s a red flag and a sign that perhaps it’s time to walk
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