Title Update

A title update is a process in which the ownership and legal status of a property’s title are reviewed and updated to reflect any recent changes. This ensures that the property’s title remains accurate, clear, and free of any issues that could affect the transaction. Whether you're buying, selling, refinancing, or securing a loan, performing a title update is an essential step to avoid unexpected complications down the road.

Why is a Title Update Important?

Real estate transactions require a clear and marketable title, meaning the title must be free from defects or claims that could hinder the sale or transfer of the property. A title update provides peace of mind by confirming that the current ownership status is accurate and that no new liens, encumbrances, or legal disputes have arisen since the original title search was conducted.

Some reasons why a title update is necessary include:

• New Liens or Claims: If new liens, judgments, or legal claims have been filed against the property after the initial title search, they must be discovered and resolved before the property can be sold or transferred.
• Recent Property Transactions: Any recent property transactions or changes in ownership that have not yet been recorded in public records will be reflected in a title update.
• Closing Delays: If the closing of a real estate transaction is delayed, a title update ensures that the title remains accurate and any new issues are addressed before the final transfer of ownership.
• Refinancing or Home Equity Loans: When refinancing a property or applying for a home equity loan, lenders often require a title update to ensure the property is free of any new encumbrances.

When is a Title Update Required?

A title update is typically required in the following situations:

1. Property Purchases: If a significant amount of time has passed since the original title search was completed, a title update ensures that no new claims or issues have arisen before closing.
2. Refinancing or Home Equity Loans: Lenders will often request a title update to confirm the property's title is still clear and free from any encumbrances or legal claims.
3. Long-Delayed Transactions: If a real estate transaction has been delayed for a long period, a title update ensures that any changes to the property’s status since the initial title search are properly addressed.
4. When There Are Title Complications: If title defects or complications arise during a sale, a title update helps identify new issues that may need to be resolved before closing.

What Does a Title Update Include?

A title update typically includes the following:

1. Review of Public Records: The title company will review updated public records since the original title search to identify any changes in ownership, liens, mortgages, or encumbrances.
2. New Liens and Claims: If there are any newly filed liens, judgments, or legal claims against the property, the title update will identify them.
3. Corrected Ownership Information: If the property’s ownership has changed or there have been any issues regarding ownership (such as a deed correction), the title update will reflect these changes.
4. Assessment of Legal Documents: The title update may include a review of new legal documents or filings, such as tax liens, bankruptcy proceedings, or judgments that could affect the title.
5. Confirming Clear Title: After performing the necessary checks, the title company will confirm whether the title is clear for transfer, or if there are issues that need to be resolved before proceeding with the transaction.

Benefits of a Title Update

• Prevents Delays in Closing: A title update ensures that the most up-to-date and accurate information is available, preventing any last-minute surprises or delays in the closing process.
• Ensures Clear Title: The main purpose of a title update is to confirm that the property is free from liens, disputes, or other issues that could complicate the sale or transfer. This ensures a smooth and secure transaction for both parties.
• Identifies New Liens or Legal Issues: If any new issues have surfaced since the last title search, a title update helps identify them early on, giving you the opportunity to resolve them before they become an obstacle.
• Lender Assurance: Lenders often require an updated title to ensure they are lending on a property with a clear and marketable title, protecting their investment.

How a Title Update Helps During the Transaction Process

1. Property Sale or Purchase: Before finalizing a real estate sale, especially if there’s been a delay, a title update ensures that there are no new legal claims or ownership disputes that could complicate the sale. This protects both the buyer and seller from unforeseen issues.
2. Mortgage Lenders: Lenders typically require an updated title to ensure that the title remains clear for the property they are financing. If there have been any new liens or claims against the property, these will need to be addressed before the lender will approve the loan.
3. Refinancing: When refinancing a property, the lender needs confirmation that there are no new legal issues with the title. A title update provides this assurance, preventing any potential issues that could arise after refinancing is completed.