What Happens if There’s a Title Discrepancy: Steps Home Buyers Can Take

A title search is one of the most essential acts of due diligence when buying a home. It ensures the title is free of defects and that the seller is the valid owner with a legal right to sell. But what happens if the search discovers a title discrepancy? Depending on the issue, it could derail the sale. This post will explore title discrepancies and what they can mean for home buyers.

What is a Title Discrepancy? The Basics of What Buyers Need to Know

Title discrepancies cover various errors or inaccuracies in a property’s title records. These discrepancies can make ownership unclear, impact property rights, or obscure what the property contains. Common examples include misspelled names, incorrect property descriptions, or missing signatures on a deed.

The causes of discrepancies can vary. Common causes include clerical errors when recording documents and incomplete paperwork. Fraud can lead to title discrepancies in more troublesome cases. Ownership conflicts may stem from inheritance disputes or unclear past transactions. While some are relatively minor issues, others could present significant challenges during a sale.

The Implications of Title Discrepancies

At the very least, a title discrepancy will complicate a real estate transaction. You typically can’t transfer ownership before a correction. With minor issues, you’re looking at a delay in the transaction. Even the simplest of corrective measures will take time. In more complex cases, discrepancies can result in legal disputes over property ownership. The resolution could be time-consuming and complicated if multiple parties claim an interest.

Resolving Title Discrepancies

While discrepancies can complicate a sale, it doesn’t mean the buyer needs to back out. Resolutions are often possible. The seller could resolve minor issues like a misspelled name by issuing corrective documents or affidavits to the county recorder. While it might delay the sale, these resolutions are typically straightforward. It’s the more complicated issues that could put the sale in jeopardy. Something like an ownership or boundary dispute may require legal action. Even settling these issues out of court can be time-consuming.

Consider Title Insurance for Added Protection

In some cases, title discrepancies can go unnoticed until after the sale. If that occurs, they could cause problems for the new owner. Title insurance can offer valuable protection against title discrepancies, like paying the cost of resolving title disputes or a legal defense. It can also provide financial protection against other title defects.

Buyers should always get a title examination before purchasing real estate. If a discrepancy arises, your title company can offer advice and paths to a resolution. For more complex cases, you may need a real estate attorney.

Do you need a title search for a property you’re buying? Click here to contact First National Title & Escrow. We offer title examinations and can help owners resolve title discrepancies. Reach out now to learn more about our services.

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