Introduction
You’re almost at the finish line in your real estate transaction when suddenly—title issues come up during closing. It’s not uncommon, and while it can feel overwhelming, there are steps you can take to keep things on track. Knowing what to do and working with the right professionals makes a big difference. Here’s a guide on how to handle title issues at closing so you can move forward with peace of mind.
Common Title Issues That Can Arise at Closing
- Unresolved Liens or Judgments
Sometimes, a property comes with unpaid liens or judgments—like overdue property taxes or contractor fees—that must be settled before the sale can close. If these aren’t cleared, they could become the new owner’s responsibility.
- Boundary Disputes
Property boundaries aren’t always as clear as they should be, and sometimes neighbors dispute where one property ends and the other begins. These disputes need resolution to ensure you’re getting full, clear ownership of the property.
- Errors in Public Records
It might sound simple, but a misspelled name or incorrect legal description can throw a wrench in the closing process. Even small errors can complicate things, delaying the transfer of ownership.
- Undisclosed Heirs or Ownership Claims
If the property was inherited, there may be undisclosed heirs or third parties who come forward with a claim. These need to be resolved to ensure that the seller has the full legal right to transfer the property to you.
What to Do When Title Issues Arise
- Stay Calm and Consult Your Title Company
First, remember that title companies handle these situations all the time. Your title company has protocols in place for managing unexpected issues and will guide you through the necessary steps. Take advantage of their expertise—they’re here to help you.
- Address Liens and Financial Obligations Right Away
If there’s an unpaid lien or judgment, your title company will work with you and the seller to clear it before closing. This might mean negotiating a payoff or having the seller pay off the debt from the sale proceeds. Taking care of liens as soon as they’re discovered can help keep the closing on schedule.
- Correct Errors in Public Records
Clerical errors, like a misspelled name or incorrect property description, can often be corrected by your title company. They’ll coordinate with the relevant government agencies to get these fixed, so you don’t run into issues with ownership down the line.
- Resolve Ownership Claims and Heirship Issues
If someone comes forward with a claim on the property, legal assistance may be necessary. Your title company, alongside an attorney if needed, will help negotiate a resolution or legal settlement to confirm your ownership rights.
- Make Sure You Have Title Insurance
If you haven’t already secured title insurance, now is a good time to consider it. Title insurance provides a safety net, covering legal fees and protecting you if any undiscovered claims or issues pop up after closing. It’s one of the best ways to ensure your investment is secure.
How to Avoid Title Issues Altogether
While some title issues can come up unexpectedly, there are steps you can take to reduce the risk of problems during closing:
- Work with a Reputable Title Company: Experienced title companies conduct thorough searches and are more likely to catch issues early on.
- Order a Comprehensive Title Search Early: Starting the title search process early can give you plenty of time to resolve any issues before closing.
- Get Title Insurance for Extra Protection: Title insurance protects you from future claims and covers legal costs, providing peace of mind.
Conclusion
Title issues can be a bump in the road, but they don’t have to derail your closing. By working with a knowledgeable title company and addressing problems as soon as they arise, most title issues can be resolved without too much hassle. For help with title searches, title insurance, and handling any title issues that may come up, contact All Seasons Title. We’re here to make sure your closing is as smooth and stress-free as possible.
