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What You Need to Know About Property Titles

We’ve come so far here at Landlord Prep Academy that we’ve started to talk about real estate topics from simple property management tips. To dive deeper into the world of property investment, it’s time for us to cover the basics of the advanced when it comes to owning land - property titles.

It may just be a piece of paper but a property or land title is the best proof that you are the owner of a home or lot. This article will also teach you how to avoid being scammed by frauds as you go on your real estate journey.

1. Purchasing title insurance

There are two types of title insurances and both are very useful when owning a property. But the first one is more important. It’s called the “Owner’s Title Insurance”. This insurance is to protect you when somebody sues due to a claim of ownership before your home purchase.

2. Title investigators

Before buying a home, you must let a title investigator look for any other problems in the said property to smoothen up and make your house purchase legal. You should also expect the investigation to take weeks.

A third of title searches uncover a lot of problems that make closing difficult or unsuccessful. Some of these common property problems include:

  • The previous owner failed to pay state or local taxes.
  • A contractor was not paid for work completed like renovations and repairs.
  • Mistakes or omissions in the deeds.
  • Document forgery.
  • Undisclosed owners, heirs, or conflicting wills.

3. A land title is different from a deed

Land titles are legal documents that prove that a certain person has rights to a specific immovable property. A deed is a legal receipt that proves a transfer of property ownership or rights from one person to another.

When buying properties, you should keep the deed of purchase, use it to get the land title, and store both the documents in a safe place.

4. Possession is different from ownership

Possession is just a legal term to say that you have the right to make modifications to the property in the absence of the true owner. However, possession of property does not grant you the right to sell a home or an area of land.

When you’re buying a home and the home seller doesn’t have a deed of sale or a land title but just a possession of the property, it means they aren’t the owner and they’re going to scam you.

5. Always verify the authenticity of the title

To check if the property for sale has legal documents, verify the authenticity of the title at the local land registration authority. You can find it usually in the town hall where the property for sale is located.

But first, you must ask for the seller’s photocopy of the title so you can use it as a reference when you’re at the local land registration authority. Then, compare the title number and the title owner’s name.

If the data matches, then the home seller and the property on sale is legitimate.

6. Check the quality of paper used by the property title

Every state may differ in the format of land title. Make sure that the property title of the home you’re buying uses the right paper quality, has watermarks, and other indicators that follow each state’s criteria of authenticity. 

7. Beware of frauds

Title theft is also as common as identity theft. The home seller might be an impersonator with a forged title. Avoid scams by double-checking everything. Ask the police for information about real estate frauds in the area and see if you’re dealing with a hoodwinker.

8. Store your title somewhere safe

Lastly, when you’ve purchased your home, deposit the land title and deeds safely in a bank. Away from fire or paper-eating pests. It isn’t necessarily panicking to lose these documents but asking for another genuine copy can be quite a hassle.

Whether you’re a real estate agent or just a homebuyer, you must know how to spot genuine land and property titles to avoid you and your client getting scammed by frauds. You must also be wary of the fraudulent activities in the local housing market and the methods they use. But that topic is reserved for the next blog.

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