Before title to real estate can be sold to someone else, it must be marketable – in other words, the title to the property must be free and clear of all encumbrances, liens, clouds, the risks of litigation, or other title defects. This allows the owner of the property to sell it and others to accept it without objection.
To ensure marketable title, a title search should be performed. A title search is a process where someone searches the public records in the city or town where a piece of property is located. The searcher will go through the grantor and grantee indexes and examine the documents recorded in the land registry concerning that particular piece of property. A title search generally includes mapping a chain of title by examining all the recorded deeds concerning the property. A chain of title is established by determining that the present owner received valid title from the prior owner, and the prior owner received valid title from that prior owner on down the line for a certain number of years. The title searcher will determine if there are any encumbrances on the property, such as mortgages. If there are no encumbrances, the title is “good and marketable.”
During a title search, several key things are examined. For instance, mortgages, real estate taxes, liens for sewers, roadways, sidewalks, and other municipal improvements, federal taxes, government claims, legal judgments, foreclosures, condemnations, covenants, and easements.