A pre-owned home is a great option for first-time homebuyers. In many cases, it’s much cheaper than having a house built from scratch, and you won’t have to deal with construction delays and budget overruns.
However, if you choose to go with a pre-owned home, make sure it has a clean title. Below are just some of the common title problems you might encounter.
Real property such as houses are subject to inheritance laws. As such, you need to make sure that the house you’re buying is not part of an inheritance claim, if so it will affect your rights to own the property. While this might not seem like a moonshot problem, do note that sometimes heirs go missing—meaning they may have at least partial ownership rights to the house you want to buy, but they just haven’t been located yet at the time of the original owner’s death.
It’s a fact that real estate is a lucrative business, so it’s not surprising that some unscrupulous people want a piece of the pie. In some cases, they might forge or fabricate a deed to dupe honest homebuyers. If you don’t do a title search prior to your house purchase, you may end up paying real cash for a fabricated deed—a nightmare for any prospective buyer.
In many bankruptcy cases, properties such as houses have to be given up to satisfy unpaid debts. Oftentimes, this means that ownership of the house is returned to the mortgage lender (i.e. banks), which then tries to find a new buyer for the property. This consideration is especially important if you’re planning to buy a foreclosed home—the courts need to release the property from the bankruptcy process first before it can be resold.
A mechanic’s lien is often filed by a general contractor before commencing work on a property. In a nutshell, it’s a kind of safety net that ensures they will get paid for the job in case the project falls through. However, sometimes the contractor forgets to file a “satisfaction” of the lien, and it remains on the property’s title. Unless this wrinkle is resolved, the closing of your home purchase can be indefinitely delayed.
While pre-owned homes can be more affordable, they’re still a huge investment. As such, it is advisable to play it safe and work with a trusted title company in Miami before closing a home purchase.
10 Common Title Problems, FirstAm.com
The Pros and Cons of Buying a New vs. Pre-owned Home, Freshome.com
These common title problems can snag your home closing, WashingtonPost.com