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Title Problems at Closing: What to Do!

Title Problems at Closing: What to Do!

Be it with a real estate agent or FSBO, buying or selling a home is an exciting and overwhelming process that is made all the more difficult if you encounter title problems at closing. If you’ve worked for weeks, or even months, to sell your house or buy a new home to later encounter closing problems, it can be incredibly frustrating. 

In this article, we’ll explore some tips and tricks of the trade that will help you overcome any issues you might face when closing on a house. They hold true whether you’re a buyer, seller, or even a real estate professional. 

Having Title Problems at Closing

Closing on a real estate transaction should be a celebration, but, unfortunately, there are several common title problems that can arise and turn this happy occasion into a frustrating ordeal at the last moment. 

Title issues refer to any discrepancies, defects, or claims that affect the legal ownership or rights to a property. These problems can surface during the closing process, throwing an untimely wrench into what should be an otherwise smooth transaction.

A clouded title is one of the most common title issues in the counter during closing. This occurs with a title search when there are unresolved liens, judgments, or other encumbrances on the property’s title.

These clouds can stem from unpaid taxes, mortgages, or legal disputes. Another issue that can arise is what is known as an undisclosed heir or missing heir; this can create complications regarding the property’s rightful ownership. This is especially true if you want to sell a house fast in Wisconsin.

You might also run into additional title issues that can arise due to errors in public records, such as incorrect property descriptions, misspelled names, or inaccurate survey information. These mistakes can lead to confusion and potential disputes over property boundaries or ownership rights.

Luckily, several ways exist to address and resolve title problems to ensure a successful closing. In the following sections, we’ll discuss these steps and what you need to carry them out, and who can help you if you have problems. 

Title Issues You Need to Watch Out For

While unfortunate, sometimes title issues are unavoidable. Some are more common than others, and some are more easily resolved than their more complicated counterparts. Here are a few of the most common title issues you might encounter: 

Errors in Public Records 

You’re going to watch out for errors in public records. Simple mistakes in the public record can lead to inaccurate property descriptions, misspelled names, or incorrect survey information. This is very true for cash home buyers in Oshkosh.

Chain of Title Document Errors

A chain of title document errors can affect the Integrity of the property’s title. This can include forged signatures on deeds, mortgages, and legal mistakes. Due diligence and working with trusted professionals can mitigate this.

You might also run into the issue of undisclosed or missing heirs. Sometimes, the previous owner’s property may have undisclosed or missing heirs, which can complicate the ownership and transfer process. Resolving these issues requires locating and obtaining consent or legal clearance from all people involved. 

Vesting Deed Errors

A vesting deed error is a mistake or inaccuracy. A vesting deed is a legal document transferring ownership of real property from one party to another. The vesting deed is typically recorded in public records. Errors can occur due to typographical errors, misspelled names, and more. 

Missing Mortgage Assignments

Missing mortgage assignments is an issue that comes up when the chain of ownership of a mortgage loan is incomplete or unclear due to the absence of recorded assignments in the public record.

Mortgage assignments are legal documents that transfer the ownership of a mortgage from one party to another, typically when the loan is sold or transferred to a new lender or investor. 

Recorded Liens 

Leins are legal claims against a property arising from unpaid debts or obligations. The most common types of liens are mortgage liens, tax liens, mechanics liens, and homeowner association liens. These can affect the property’s title and must be addressed and resolved before closing.

Boundary Discrepancies

You might also run into boundary discrepancies. These are disagreements, conflicts, more inconsistencies regarding the physical boundaries of a property. These disputes can arise for various reasons, such as differences between property surveys, unclear legal descriptions, or conflicting interpretations of property lines. You can trust our advice as we buy houses in Milwaukee

Unresolved legal issues are another major problem that can lead to title issues. These include divorce proceedings, probate matters, and boundary disputes. These issues can cloud the title and should be resolved quickly. This can be complicated if you don’t have the paperwork needed to sell a house

Missing Mortgage Assignments

What To Do If You Come Across a Title Error

Discovering a title error can be concerning during the closing process, but there are several steps you can take to address the issue and protect your interest. Here are some options you have when it comes to addressing a title error.

First, consider documenting the specific title error you have identified. Gather any relevant documents you have, such as the title insurance policy, purchase agreement, or previous title reports. Ensure to carefully review these documents to understand the nature and extent of the error thoroughly.

The next best thing you can do is contact a qualified title professional, such as a title company or real estate attorney specializing in title matters. This type of professional can provide expert guidance and advice tailored to your situation.

If you still need to do so, you will also want to review your title insurance policy. Title insurance protects against losses from title defects, including many of the errors mentioned here. You will contact your title insurance company to discuss the situation and determine if your policy covers the identified title error.

Next, we recommend that you work to rectify the situation by taking the following steps. First, if the error results from an incorrect or incomplete deed, a corrective deed may need to be prepared and recorded to amend the title records. Keep all this in mind if you are selling a house quickly on your terms

Another option is to pursue a quiet title action when there is a dispute or uncertainty regarding ownership rights. This legal proceeding aims to establish clear ownership and resolve any conflicting claims.

Legal documentation, such as affidavits, releases, or quitclaim deeds, may be required to determine the appropriate legal steps. Contacting professionals who specialize in these matters can help with these problems that may arise when you have problems with the title during closing.

It is imperative that, throughout this process, all parties are kept up to date and communicated with. You’ll want to involve and inform all parties about title errors and the actions being taken to address them. 

This includes but is not limited to, lenders, buyers, sellers, and any other parties interested in the property. Maintaining a clear line of communication can minimize misunderstandings and facilitate a smoother and faster resolution.

We highly recommend also seeking out legal advice. This can depend on the complexity of the title error and the potential implications, but most people seek legal advice to keep all their bases covered. An attorney experienced in real estate and title matters can provide tailored guidance, helping you navigate legal processes and protect your interests.

It’s important to remember that every title error situation is unique, as are the specific actions required to address it. Make sure to consult with professionals who specialize in title matters and who can provide you with the most accurate and appropriate guidance for your particular circumstances.

Wrapping Up

Closing costs aren’t the only inconvenience you can have when finalizing a deal. Title problems at closing can be a daunting experience for any real estate buyer or seller. However, it’s crucial to remember that these issues can be addressed and resolved with the right approach and professional assistance. Taking proactive steps and following the appropriate course of action can protect your investment and ensure a smooth closing process.

To reiterate, the first critical step when faced with title problems is to document and review the error carefully. Consult with the title professional, such as the title company or real estate attorney, to ensure you have all the information you need to navigate the complexities of title issues. They can provide their expertise and help guide you through necessary actions.

Conducting a comprehensive title search and obtaining title insurance is of the utmost importance to address any title problems. Title searches can uncover any additional issues and shed light on the root cause of the problem. There may be specific steps you need to take depending on the nature of the problem. This could involve everything from preparing corrective deeds, pursuing legal proceedings, and obtaining or recording necessary legal documentation.

While title problems can be challenging and sometimes overwhelming, they are not necessarily insurmountable. But by remaining proactive, commonly formed, and working with the most qualified professionals, you can address any title problems at closing while safeguarding your investment.

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