In Florida and other states, navigating the complexities of purchasing real estate can present numerous challenges. The factors affecting a smooth transaction close include title issues, which can create significant hurdles.
It is essential to understand the potential problems that can arise, especially if you are purchasing a distressed property. The following three common title issues can create significant delays in a real estate closing.
Unresolved liens
A property may have tax liens, mechanic’s liens and HOA liens in addition to a mortgage lien. A title search will reveal existing liens that need resolution before the real estate transaction can close. Unresolved liens are one of the primary title issues that can delay the closing.
After identifying the liens, resolution involves determining their validity and ensuring they are paid and released. The mortgage lien is typically paid and released with the sale proceeds. You may need to negotiate the payment and release of other existing liens with the seller or track down the appropriate party to draft a lien release. Either way, resolving recorded liens can take a significant amount of time.
A clouded title
A clouded title means that some issue or discrepancy has created doubt about the ownership or transfer of the property. Issues can include:
- Undisclosed interests
- Undisclosed easements
- Conflicting legal documents
- Unresolved claims
- Missing signatures on a deed
- Conflicting property boundaries
These issues may require thorough research, gathering necessary documentation and potential legal remedies to clear the property’s title. These steps can significantly delay the title closing process.
Missing mortgage assignments or releases
Sometimes, a seller paid off a property’s mortgage or transferred it to another lender, but someone did not correctly record the corresponding release or transfer documentation. This title issue creates uncertainty about the property’s legal ownership.
Resolution involves tracking the original lender or mortgage holder and obtaining the necessary mortgage assignment or release documentation. You must then ensure the correct information recording with the relevant parties.
When buying real estate, it is crucial to identify these issues and seek prompt resolution. By doing so, you can increase the chances of having a smoother, timely closing process.