Before selling your home, it is important to determine if there are any outstanding issues regarding your home’s title. If you have uncovered any title defects during the title search, then you must resolve them before the home can be sold. In this blog, we will discuss common title defects and how to resolve title issues on your property.

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What are Common Title Defects?

A title defect refers to any potential threat to a current owner’s full right or claim to sell a property. Titles can be divided into four rights: right of possession, control, exclusion, and enjoyment. At any point, title rights can be divided and given away to the different parties. The most common title defects include public record errors, unknown liens, missing heirs, and forgeries to name a few.

 

How to Resolve Title issues

Before directly addressing any title issues, we recommend working with a title insurance agency, such as Metropolitan Title. As experts in the industry, we keep your best interests in mind while providing peace of mind to you throughout the process.

However, if a title issue goes unresolved, this is referred to as a cloud in the title. Here are the solutions for solving the following:

  • Liens
    • A lien occurs when there is unpaid taxes or mortgage debt associated with the property. To resolve this, you will need to pay the outstanding balances.
  • Mechanic’s Lien
    • Similar to unpaid mortgages and taxes, a mechanic lien refers to construction work that occurred on the property, but was never paid for. This lien does not transfer during the home sale and sticks to the property itself, which means the new owner may have to pay the balance to clear the title cloud.

 

Quitclaim Deed

Quitclaim deeds are often used to correct title defects.

 

When it comes to the more complicated title defects such as heirs then there are other directions you can take. One common way to correct a title cloud is through a quitclaim deed. This deed is commonly used in property transactions that do not involve any finances, such as transferring the property between family members. The grantor can sign a quitclaim deed to convey any of their remaining interest in property to the new owner or grantee along with the clear title.

Preventing Title Issues

Title issues may surprise many home sellers but there could be issues that existed when you first purchased the home. The best way to protect yourself from title issues is by performing a title search when you first decide you want to sell your home. This will allow you to clear up any unexpected problems before closing day.

Avoid these common title issues on your property by working with Metropolitan Title. As Indiana’s Title company, we are here to provide exceptional service and ensure that you receive all the necessary information to close your home on time. If you need assistance performing a title search or purchasing title insurance – contact us today.