What is a title and how does it get cleared?

“I just signed a contract to sell my house, and now the title company is saying we must have a clear title first.”

With a car, a title is a piece of paper that shows ownership. To sell the car it’s as simple as signing the title and handing it to the new owner. Unlike the title for a car, there is no paper “title document” for real estate.

Think of a title as more of a process to prove the ownership of a property.

Imagine a property title as a chain with each link showing every time ownership has changed between people. As a property has been sold over time, and through multiple owners, there is a process of recording those transactions with the county. Often times there may be a situation where a property has been inherited, decided by divorce, court case, or bought and sold without being properly recorded with the county.

The Title Company is ensuring that the ownership of a property has been transferred and recorded properly and that there are no missing links in the “chain of title”

All liens, mortgages, and taxes have been paid, property boundary lines have been established, and no other person can claim ownership.

One thing to keep in mind if you are a seller who has worked in the real estate, banking, insurance, finance, or title business in the past, that the laws, policies, and procedures change every single year. The title industry standards and procedures are set and regulated by the State of Texas.

What may have been allowed in the past might not be a legal procedure today. Which is why we turn to the experts at the title company to facilitate closings. They are up to date with all of these changes and abide by them. This protects both the buyer and seller in the home selling/buying process.

 

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