Friday, March 24, 2017

The Importance of Marketable Title in Real Estate

There are a number of key elements that an individual has to consider when starting the search to purchase a home. After you have found a home that interests you and an offer has been accepted, but before you sign the final contract, it is important that you secure marketable title and that the home passes inspection. Home inspection allows the potential buyer to come into the home with a certified third-party inspector who will examine a number of qualities about the house and make a determination of whether the house is livable and worth purchasing. Marketable title on a house is given to show that the title is free of liens or defect.

Marketable Title

If it is found that a house has marketable title, a factor on which the contract for buying a home is usually contingent, it will force acceptance of the contract and purchase of the home. Marketable title is given at the closing of the home, but can be requested prior to closing. A title examination is performed by a licensed attorney or by a title insurance company. Title insurance companies specialize in finding defective titles, titles with a mortgage or lien against them, as well as titles with conveyance issues such as right of way or easements. Additionally, you will get a chain of title, which outlines previous ownership of the property, giving you an idea of how many previous owners there were and the nature of its use.

It is not uncommon for a title to come up with something on it, such as an easement or a right of way. When this happens, it is generally not grounds for cancellation of the contract. The current owner will be given a good faith attempt to have the mark on the title removed, whether by contacting his or her bank, the previous landowner, or the individual with whom a land use agreement was made. Once a title is cleared for marketability, the bank can proceed with closing, assured that the purchase will be a legitimate, clean title to a new home.

Upon closing, the new owner will be given a few things in order to secure title. A title commitment is given, which contains the type of insurance policy being submitted, who the buyer and seller are, the legal description of the property in question, as well as a list of items that must be verified as correct in order for the policy to be issued, and any exceptions or items not covered under the title commitment. Once that is accepted, the buyer has a new home.

Considering Home Ownership?

The purchase of property is a monumental step in many people’s lives. If you or someone you know is purchasing a home and seeks the assistance of an experienced real estate attorney, our office can help. Please reach out to attorney Nesbitt by phone at 303-741-2354 or using our website.

Eric L. Nesbitt, Esq.
Law Offices of Eric L. Nesbitt, PC
Phone 303-741-2354
Email Us
Nesbitt Law Offices Website

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