There are many reasons you can’t just walk into a brokerage firm, swipe a credit card, and walk out with the title to a gas station, a piece of land, or an office building.
Smart property buyers know that they need time to perform “due diligence.” But even if they decided to skip due diligence steps like inspecting the property or auditing the financial reports (a bad idea to begin with), the title search is the one piece of due diligence you really can’t skip.
No title company will close escrow on a property without a title search. The title search, sometimes referred to as “legal due diligence,” is how you confirm that the property is legally authorized to change hands. This can be a quick process, or a lengthy process. How long it takes to do the title search on a property sets the bare minimum turnaround time on a property closing.
So how long does it take to get a title search back?
What Is a Title Search?
To understand how long a title search on a property takes, it is important to understand what a title search is.
A title search is an audit of public records for confirmation that the title is fit to change hands under the terms of the contract for sale between the buyer and the seller.
Why might the property not be fit to change hands? The seller might not be authorized to sell the property. The property might not be authorized to be put to the use for which the buyer intends it, or it could contain unpleasant surprises.
Steps of a title search typically include:
- Chain of Title Search. A recounting of all the past owners of the property and when it changed hands. A missing link in the chain of title could result in an unknown third party claiming ownership of the property and previous sales invalid … meaning the right to sell is theirs, not the purported seller’s.
- Lien Search. A lien search will reveal if any bank, individual, or governmental body reserves the right to foreclose the property if the lien is not settled in the closing. Possibly liens include mortgages, tax liens, mechanic’s liens, attorney liens, HOA liens, and demolition liens.
- Tax Record Search. This search examines the property’s history of tax assessment and tax payment to make sure any back taxes are settled in the sale.
- Inspection for Deed Restrictions. Deeds sometimes come with restrictions, like easements which permit limited public access to the property. Other deed restrictions could include a ban on hunting, keeping of livestock, or subdividing.
- Inspection of the Property. This isn’t an inspection for leaky pipes or a cracked foundation, but an inspection that the actual property conforms to its survey and legal description.
How Long Does a Title Search Take?
A title search can take anywhere from a few hours to two weeks, sometimes more.
Why the big variance? Because some properties have a long history, and you never know what will pop up. For this reason, title companies and professionals like biproxi budget at least two weeks to clear the title.
At the short end, consider a commercial building. You might think the title history is simple and can be completed in a heartbeat. In some cases, you may be right. It isn’t a guarantee, though. Someone probably owned that land before anything was built on it, so there’s still a chain of title to inspect.
Additionally, that land may have been subdivided from a larger parcel before it was built upon. The title must be inspected to confirm that the subdivision was properly completed … or else the plot of land you want to buy might not even legally exist.
If the title search uncovers a problem with the title, it might be referred to as a “defect” or a “cloud on the title.” The property may not be able to legally change hands until the cloud on the title is “cleared.” This is also sometimes referred to as curing the title.
How Long Does It Take to Clear a Title?
If defects or “clouds” are discovered on the title, it may take up to several weeks to cure the title … if the title is even curable. If you have commissioned a professional title search from a company like biproxi, hopefully you never see the steps that go into clearing the title. The title searcher merely comes back with an impeccable title, hopefully in time for the scheduled closing.
To understand how long it might take for a title company to clear a title, you need to understand what kinds of issues the title search might turn up. Examples include:
Public Record Errors
Since the public records pertinent to a title search are legal documents, everything must match precisely. If a single comma is in the wrong place on the legal property description on the title, it must be corrected. It’s not as simple as firing up MS Word and changing it. Changes must be verified, processed, and filed to be valid, and this process often moves at the speed of bureaucracy. Hence, the time allowance.
Survey or Boundary Disputes
The survey inspection may reveal that two adjacent surveys claim the same strip of land as being part of their property. You can’t sell a property if part of the described property is claimed by someone else. To cure this defect, a new survey may need to be drawn, or the dispute might have to be arbitrated.
If liens are attached to a property, it often cannot change hands. Sometimes “subject-to” sales try to transfer title while leaving a mortgage lien in place. The lienholder has the right to foreclose on the property if someone tries this … but might not do it if the buyer settles past-due balances and resumes on-time mortgage payments. Closing this kind of transaction can be tricky, and requires a specialist closing agent.
A title search may turn up people who claim to have a right to the property by heirship or legal bequest. They may claim that somewhere in the chain of title, the property changed hands without their permission when they had a right to it. Missing heirs can be a serious challenge to a sale, and you need to know about them fast to avoid a costly disaster.
In the U.S. this is common for people with names like “John Smith.” If you accidentally get your records crossed with a John Smith who has missed 25 child support payments in a row, John Smith’s delinquency could be filed as a lien on your property—the wrong John Smith. This kind of mix-up requires an “affidavit of identity” to be filed … which takes some processing time.
All of these title defects take time to cure. Without experience in how to clear them efficiently, it could take even longer than it has to and possibly postpone the closing, to everyone’s detriment.
This is why most parties to a transaction prefer a professional title search by an experienced vendor, to make sure it is done not only correctly, but as quickly as possible.
Reach out to biproxi about speedy, affordable title search services today.