Title Problems at Closing In San Francisco Bay Area
Sometimes, title problems can suddenly appear right before selling a house. In the best situation, these problems are small and only slow down the sale. But in the worst case, the sale falls apart, wasting all your efforts.
Common title problems that can slow or stop a home sale include mistakes in public records, unknown debts or claims, title scams, hidden wills, illegal documents, mistakes in surveys, easements, and other complications. To avoid delays during the final steps of selling your home because of title problems, do a title search early and work with a real estate lawyer to fix any issues, especially legal ones.
Fixing a title problem while selling a house in San Francisco Bay Area can be tough. But if you understand the basics and know where to get help, you can still close the deal. Keep reading to find out how to avoid delays and solve title problems!
What is a Professional Title Search?
A title search checks documents and public records to make sure the house’s title is clear of any hidden debts, disputes, mistakes in legal descriptions, or other problems that could stop a sale. It also confirms someone’s legal ownership of a property.
Usually, you’ll need a full title search done when a mortgage lender asks for it to make sure the house, they’re lending money for can be sold without issues. Basically, a title search is necessary to safeguard both the buyer and the lender.
Title Companies
Title companies typically conduct a title search for the buyer or lender, allowing the seller to resolve any title problems.
A title abstractor or officer employed by the title company is responsible for examining land and property records to confirm ownership, identify issues, and potentially resolve them.
Abstractors communicate with lenders, agents, and other legal entities linked to the property and produce a preliminary title report. They investigate court judgments, previous deeds impacting property rights, tax records, settled mortgages, and more.
Title Insurance
Another role of title companies is encouraging buyers to purchase a title insurance policy that protects them from conflicts that can be traced to the property’s previous owner. They provide the homeowner with a copy of the Title Commitment, which discusses what is included when they purchase title insurance.
Common Title Issues at Closing In San Francisco Bay Area
Title problems, also known as title clouds or title defects, are issues that must be fixed for a home sale to happen. Typically, these problems fit into two groups—fraud and errors.
Public Record Errors
The papers showing who owns a property and its important details may have been mistaken.
If there’s missing info, mistakes in the legal description, or errors made by the paperwork team, those are called title problems. They need fixing before the property sale can happen.
This also covers mistakes made during filing. Fixing these mistakes on the property’s papers can cost a lot.
Unclear Boundaries or Survey Errors
Surveys are done to measure the legal boundaries of your property. Ideally, you should have a copy of your property’s survey, but if you don’t, the buyer may commission a new survey. If errors are found, you will be tasked to settle the issues.
Easements
An easement happens when someone else can legally use your property for a specific reason. For example, a school may have permission to have their students walk through your side yard because their building is nearby. Another instance is when utility companies need to reach cables or power lines on your land.
Easements are usually made for the benefit of the entire neighborhood, but they can also impact the sale of a home, especially if not found and talked about early in the process.
Liens
A lien is a common issue found during real estate closings. If you owe taxes or debts, your property may have lien problems.
When a lien is on your property, you lack a legal claim. To avoid delays in selling your home due to this issue, you must pay off your debts.
Sometimes, the previous owner resolved the lien but didn’t get official clearance. This issue can be fixed by making a payment to update the records.
For child support or mechanic’s liens, you must settle the debt from the sales proceeds before or during closing.
Unknown or Missing Heirs
A title search may uncover a disagreement over who owns the property, which often happens when the previous owner passes away before selling the home.
Multiple heirs or inheritors may stake a claim on the property, or there could be a missing person whose consent is necessary for the sale. Additionally, relatives may challenge the right of the heir to claim ownership, citing legal matters like adoption, and so on.
Title Fraud and Forgery Issues
Title fraud often happens when someone steals or fakes papers. If the person who owned the place before used another’s info and said they owned the house, this gets found out in a title check. Then, it’s hard to sell the house, and you may get called a fake owner.
A big example of this, says the American Land Title Association, is when one spouse fakes the other’s signature.
It’s like signing a tax form together without telling the other person. But it’s tough for a title officer to spot. Luckily, title insurance could help cover this if you got it when you bought the place.
Encroachment Issues
Encroachment means building or expanding a property in a way that breaks the rules of the neighbors—basically, crossing the line shown in the property papers.
It could be as basic as putting up a fence a bit too far into the neighbor’s territory or constructing a big new building that takes over your neighbor’s land.
If you or the person who owned the property before you did any encroachment, sorting it out can be a big hassle and cost a lot of money.
Illegal Deeds
If a previous deed is documented or filed by a person with an unsound mind, a minor, or an undocumented immigrant, its enforceability can be affected causing the home sale to fall through.
Undiscovered Will
Usually, when a property owner passes away without a clear heir, the state can legally take control of their assets, including the properties they own.
If you bought a home previously owned by a deceased individual without a clear will, your legal ownership of the property could be at risk if a will is found later. Even if the title is in your name, you may not be able to sell the home until ownership matters are resolved.
How to Resolve Title Issues In San Francisco Bay Area
Curious about fixing title problems for a clean title?
Usually, the initial move in handling title issues is spotting them. This will aid in grasping and managing the situation. Then, you should collaborate with experts who specialize in the legal aspects of these problems.
For further assistance, here are three suggestions for dealing with title issues that may be useful.
Work with a Title Company
As mentioned before, title companies uncover deed problems and offer title insurance. After identifying issues, they advise on what to do next. They may propose straightforward fixes such as clearing debts or advise consulting a real estate lawyer if you weren’t aware of title defects. Typically, buyers select the title company for property deals. However, if you wish to address issues early, you can hire one, keeping in mind these factors:
- Reputation: Since the title company will coordinate perhaps the biggest sale of your life, you must ensure that they’re reputable. If you are searching online, you’ll know they’re reputable if they have an easy-to-read and up to date website that contains the services they offer, their address, links to their pages on social media, as well as testimonials. You may also check public records or Google and Yelp reviews to see if they have successfully helped resolve title issues before.
- Office Location: When fixing title issues, the title company should be proactive. This would be possible if their company quarters are near you or if they have a satellite office in your area. If they are really far, they should be willing to send their abstractor or agent to your location.
Despite being your number one go-to in terms of title issues, the title company can only do so much. In most cases, you’re the only one that can resolve the clouds on your home title.
Hire a Real Estate Attorney In San Francisco Bay Area
While it may cost you a bit to enlist a real estate attorney or closing attorney, sorting out title problems with their assistance can be quick and straightforward. They can aid in fixing mistakes in the official records by re-filing the deed. Additionally, they can resolve disputes over property boundaries or ownership, and handle contested wills or liens.
To clarify, real estate attorneys can assist with various types of liens like child support, mechanics, state tax, or those related to mortgage loans.
Involve Your Licensed Real Estate Agent In San Francisco Bay Area
Lots of sellers don’t tell their agents about title problems, worried it’ll slow down selling the property. While the concern makes sense, it’s best to avoid it altogether. Keep in mind, real estate agents are experts. They’ve likely handled similar situations and can help you out. They know what title insurance covers and can advise you accordingly.
Take Charge of Issues You Can Solve on Your Own
Title problems can often be fixed without hiring pros. This saves time and money when you change ownership of your property.
For example, if a title search finds a lien on your property, reach out to the lien holder and ask for proof of the debt. Then, discuss a payment plan. If you’re having boundary issues with neighbors, consider buying the part of their land you’ve encroached on. If there’s confusion among heirs causing a title cloud, consider signing a quitclaim deed. This removes ownership without guarantees.
Do Cash Buyers Purchase Houses with Title Issues In San Francisco Bay Area?
Yes. Cash buyers purchase houses with title issues because they can wait for them to be resolved. There is a smaller chance that a real estate transaction will fall through when you sell to a cash buyer, even if your house has title issues.
But it’s key to remember that if a lien pops up during the title search, it could impact the cash offer.
For example, if the debt exceeds the house’s offer, the cash buyer may not be able to cough up more to seal the deal. Basically, the cash offer would just cover the lien and may not cover it all. This applies to regular buyers too.
Final Thoughts:
Title Problems at Closing In San Francisco Bay Area
In real estate, addressing title problems takes up a lot of time and causes stress. But even the smallest issue shouldn’t be overlooked. It’s better to tackle these problems early on rather than dealing with them when closing the deal.
If you’ve uncovered all the title problems with a property and they’re preventing a successful sale through the usual channels, think about selling to a cash buyer in San Francisco Bay Area.
At We Buy Houses in San Francisco Bay Area, we make fair cash offers for properties with title issues! We’re willing to wait for these issues to get sorted out, making the selling process easy for you.
Fill out our form below or give us a call at (408) 557-7554 to find out more about selling your house with title issues in San Francisco Bay Area.
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Author: Saini
My name is Saini, and I founded the We Buy Houses in San Francisco Bay Area team with years of experience in the real estate industry. I have assisted numerous sellers in selling their homes quickly, “AS-IS”, and for a fair price.
He’s been featured in multiple publications including Yahoo Finance, GoBankingRates, LegalZoom, The Mortgage Report, Apartment Therapy, US News and World Report, and SuperMoney among others.