What is a Title Search and is it a Requirement?
What is a title search?
A title search refers to the process of researching the ownership history of a particular property. Often times this history is referred to as a “chain of title”; with each “chain” representing a time in which the property was transferred (i.e. sold). Attorneys research a property’s history through “chains”, because when the property is transferred, the seller(s), generally, must transfer property that is unencumbered.
An unencumbered property is one that does not have any unpaid mortgages, tax liens, mechanic’s liens, judgment liens, or outstanding interests in the property. These types of encumbrances are exactly what your attorney is looking for when he completes a title search for your property.
Am I required to obtain a title search?
In South Carolina, if a lending institution is financing your home for you, you will without a doubt be required to obtain a title search on the property. The reason why is simple: if a person does not make their monthly payments, the only recourse (generally) a lender will have to obtain the money it has financed is to foreclose on the property.
In order to make sure the lender will receive at least the amount of money it gave you to purchase the home, the lender must be a first lien holder. The position of first lien holder is important because the first lien holder on a property is insured that in any foreclosure proceeding the monies owed to the first lien holder will be paid off first. The title search is what shows the lending institution what position it will be in should the property be foreclosed on.
On the other hand, if a buyer of a property purchases the home without the assistance of a bank or lending institution, there is nothing in South Carolina Law that requires this type of buyer (typically a cash buyer) to obtain a title search. However, purchasing property without first obtaining a title search is an extremely risky proposition and is not suggested.
If you’ve ever got any questions regarding a title search or any other legal matter, please feel free to reach out to me.
Tyler S. Gregg, ESQ.
1614 Taylor St.
Columbia, SC 29201