Title Issues When Selling Your House
February 28, 2018
The title of your house must be ‘free & clear’ before you can sell the home. You might be wondering, why I need a new title report while I did my research when I bought the house.
‘The house was clear of all issues and I have kept it in great shape. Now I am transferring the title to a new buyer. What is a big deal?’
You might have maintained the house with great love and care, but this does not imply that your home is currently clear of all title issues. Ownership issues keep appearing. Judgments, liens or even filing bankruptcy may create title issues for you. It is best to consider these issues and perhaps get a new title report to prevent any delays at the time of closing.
IRS Tax Liens
The IRS might attach a tax lien on your property if you do not pay taxes promptly. These types of issues remain hidden unless you search for them exclusively. Tax liens can appear whether property taxes or income taxes are due.
Judgments
An unpaid loan, short sale issue, or a forgiven loan that was not reported might create problems for you. In some cases, non-payment of child support and spouse alimony results in judgments against you. It is a possibility that those judgments are the result of the negligence of a previous homeowner.
Contractor Liens
Any professional contractor who works on your property but does not get paid can file a complaint that might prevent you from selling the property. The only way is to contact the contractor, clear their payments and have them remove the lien.
Identity Affidavit
Public records can contain errors. When a title company searches for property records, the search begins by finding your name. Duplicate names or similar sounding names can create errors in documents. If your name is ‘Daniel James.’ Someone else might own the same name and entirely possible, errors with your property title are just the result of a simple misunderstanding.
The solution is to sign an identity affidavit claiming that you are the owner of the house.
Unknown Liens with Distressed Properties
Former debts and ownership issues can appear even after you have closed on the sale. Not everyone likes financial bookkeeping. We have witnessed this situation with distressed assets. The lien issues arise when a house has been bought and owned. You need to contact a real estate attorney to get the problems resolved.
Illegal Deed
The presence of an illicit deed indicates that the previous deed was created by a minor or someone with a fake identity. The transfer of illegal deed can seriously put your home in danger. The house is officially not yours unless the transferred contract is legal and sound.
How to Correct Title Issues?
If you a title insurance plan in place, the company will take care of the issues. They will do the heavy lifting and before you realize the situation, the problem will be solved. In some cases, the company might ask you to sign the following three documents:
- Quit Claim Deed
- Releasing Liens Judgments
- Deed of Reconveyance
This is done to release any liens and judgment against the property. The first document removes an heir from the list of property owners. The second document clears up mortgage or debt issues while the deed of reconveyance records the complete payment of loan under a deed of trust.
How to Sell a House with Title Issues?
Like mentioned earlier, it will be easy to tackle the issue if you had invested in a secure insurance plan. If the insurance company seems like a fraud or you did not buy the protection, then there is a lot to be done before you can sell the house.
Immediately get in touch with a reputable real estate attorney to discuss possible solutions. The lawyer might charge you a fixed price or an hourly rate. He will perform the research and will guide you on the way out of this problem. You can also contact Habitat Developers LLC to carry on the sale of your house. The company can buy your home as-is. We will contact a title company and a real estate attorney to get the issue resolved. However, if you are planning to sell your house fast, you can sell the home without the effort. Click here to get your no-obligation, cash offer. We will close the deal in next 10-14 days.