How long does a title company realistically need to perform a proper title search on a single family home?
Is the title company responsible to find "any" lean that can show up against the property?
I have bought several properties from wholesellers over the last few years. It seems that they are wanting to close faster and faster; down to 9 days from the time of signing the contract. (this is buying with cash or hard money)
I have also heard recently where something was missed in a title search and the title company was disputing that they were responsible.
Thanks for the help!
A couple of days is plenty for “recorded liens” and encumbrances.
Unrecorded things like code violations (which may eventually become a lien), utilities, etc can take s couple of weeks since the city/county responds to a written request. It is theses things, which often are not searched for, and therefore not covered, which will usually bite you.
The answer to this question absolutely depends on your jurisdiction-- not just State to state (Attorney Certification states, v. Title Plant States v. Torrens States v. jurisdictions that record municipally as opposed to county, etc.) Texas can be trickier than many jurisdictions-- they don't subscribe to the forms and processes of 90% of the country.
I spent 10 years doing complex title work for large law firms and nationally for infrastructure companies. here's my rule:
ALWAYS GET TITLE OWNER'S TITLE INSURANCE. Always.
1) you are required to a Lender's Policy for the lender anyway;
2) for a little more money (like, a dollar-per-thousand) and what's called a "Simultaneous issue fee" (about $1-200) you will be insured.
That means any encumbrance that does NOT show up on your policy, the Title Co. has an obligation to cover you; that includes omissions.
Sorry, @Brad Chatrou , was running into a meeting. I would say 7-10 days is reasonable for an Examiner to review, and for a Title Co. to issue you some report, Commitment or Abstract of the matters.
Additionally, as @Wayne Brooks said, certain utility, building, planning and/or zoning matters will not show up on Title, but they may still encumber the property. These omissions are not included, unless you ask for them to be included and unless you get an Endorsement from the title insurance co. that indicates that they are included.
As a title Attorney, I could tell you quite a few tales that would keep you awake at night. Just buy the title insurance.
@Brad Chatrou It depends on the property and the professional doing the title search... and as @Wayne Brooks pointed out, sometimes you need to rely on third parties such as the government (ugh) to provide information.
If the property hasn't changed hands much and the parcel being sold is the identical piece of land that it was 100 years ago, things are fairly straightforward. Like as in a matter of hours (if you have the full attention of your professional).
However, throw in a bunch of transfers and multiple chains and then anything "interesting" ... and things can start taking time to figure out, especially if your professional is overloaded.
So around here we generally turn full searches (residential) around in ~5 days.
In North Carolina, you need an attorney to issue a title opinion because they are agents for title insurance companies. Essentially - from my understanding (please correct me if I’m wrong) -the attorney issues the title report and the insurance company insures the attorneys findings. Here in Asheville, attorneys are so busy that if you’re not “in” with someone , expect 3-4 weeks for title and closing.
I had done prelim title search on a property that was about to go to auction and wanted to buy before tax sale; a lawyer wanted $1500 to do a title search in a week. (They missed judgements I found btw!). I ended up closing with another firm that took 6 weeks to do the search, despite me having given them all the judgements I found.
I now have a lawyer who can close in a week for a reasonable fee.
Lauren, (sorry— can’t tag you on mobile) you are correct, save for a couple of minor clarifications.
In many states, including NC and TX, to my knowledge, the Title insurance industry is regulated by the state Insurance commissioner.
Additionally, Title is required to be certified (in NC, but not necessarily Tx from my recollection) by an ATTORNEY.
Therefore people who are fully authorized to practice title (in NC) are both licensed attorneys and licensed insurance providers.
As a non-attorney, you may be able to issue Title, but the jurisdiction requires that attorney cert., so you would still be held up and not entirely autonomous as an Agent... unless you employ (or retain) an attorney(!)
On the other hand, to generally examine, abstract, analyze, or negotiate coverage, one does not need to be an attorney, but may benefit from being employed by either a law firm or Title company.
So, that’s as clear as mud, right? It’s kind of like the jurisdictions where in order to practice RE brokerage activities, you must be licensed...but there are carve-outs for full time property manager/development company employees— they can still market and show homes in their portfolios without a license.