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How Passage of Title Works

By Karen Godfrey

What is the passage of title? The passage of title is the most important part of the home buying process. It is the transfer of ownership from the seller to the buyer. In order for you to take full ownership of the property, you must hold the title to that property.

There are a times when a seller is unable to pass along a title for various reasons. They may have a lien on the home from a lawsuit or other debt in other words, creditors may be claiming against the home. If a title is passed on to you with these items still attached to the home, it can cause a huge amount of problems for you the buyer. You have literally just bought someone else's problems. A property carries the financial burdens of each family that owns the home. There have been instances of liens surfacing on the history of a home, sometimes from three or four owners back.

The passage of title process begins with the buyer completing a title search, using a real estate lawyer or title company. This is a vital first step, because making sure the title is completely clear and free of "clouds" (liens) will help you avoid delays during closing. If the buyer is securing funding through a lender, then they will require this search.

If anything comes up during the search process, such as a lien or other financial obligation, the owner will need to take care of the problem before they can legally sell the home. In the process of selling a home, sometimes creditors can file a claim against the home, further delaying the process.

During the purchase of the home, it is advisable that you purchase title insurance. This will cover you and your mortgage company if an issue arises after the sale.

After you have completed all these tasks, on the day of closing you will sign "the deed" which is the title to the home, and it now becomes yours.

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