Buyers beware, avoid these common title issues

| Apr 27, 2021 | Real Estate Transactions

Whether looking to purchase real estate as an investment property or family home, for residential or commercial purposes, the importance of due diligence cannot be overstressed. While taking the time to review the property, location and price are all an important part of the due diligence process, one step that can result in catastrophic problems if not fully explored involves the title.

Watch out for these four big issues when conducting a title search

It is important to complete a thorough title search to check for any hinderances like cost-sharing agreements, easements, zoning issues or overdue taxes. If not properly addressed, any problems with the title could transfer to a new owner. This could include the review of annexation agreements. These agreements may provide information about the property’s connection to certain municipalities and the service offered therein. It could also unearth a cost-sharing agreement or easement that could impact your use of the land. A common example is a shared driveway or driveway that meanders over the property line. A potential buyer may want to renegotiate the terms of these agreements.

Depending on your plans for the property, you may also need to complete a thorough review of the zoning regulations. Before closing, the buyer should also review the property’s tax certificate. If present, consider which government agencies are levying taxes on the property. This could be a sign of a potential problem that may impact your future use.

The deal may require additional negotiations before closing

A thorough title review should include the careful examination of any instruments that run with the land. In some cases, these instruments may worker in a buyer’s favor. In others, they could cause problems. It is important to have professionals review these documents and provide this information so you can make the decision that is in your best interest.