Definition - What does Title mean?
A title, as it relates to real estate, establishes who has legal ownership, exclusive use, possession and conveyance of a property or home. Prior to buying or selling property or real estate, there must be a clear title.
Justipedia explains Title
Common issues that might “cloud” the title include an improper recording of ownership, previous liens or encumbrances, covenants of record, or failing to follow proper real estate or state procedures when filing real estate documents.
A clear title has always been an issue for homeowners—whether due to taking out other loans collateralized by the house, a second mortgage or construction loans for home improvements. However the real estate bubble, which started in 2006 and culminated in 2012, caused massive decreases in home values, and led to new considerations for home buyers and sellers to establish a clear title.
Whether from bankruptcy, foreclosure, a short sale or a deed in lieu of foreclosure, home buyers must now be especially careful to ensure that any home they are considering buying has a clear title. To do this, all home buyers should review any potential property and minimize the chance that the property has a defective title by performing a title search. More aggressive title searches can also be done by filing a quiet title action. This action allows the court to review relevant documents to determine the true owner.
Agreements can also be made with home sellers, which state that if the seller cannot prove that they have a clear title, any prior agreements are null and void. Additional insurance protection, referred to as title insurance, can also be purchased to protect homeowners who think there may be an issue with the title.
Homeowners facing issues from a result of a defective title can contact a real estate lawyer. Real estate lawyers understand state laws and can help file lawsuits if necessary to ensure that titles are clear.
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