During a residential real estate transaction, both the buyer and the seller will need to meet multiple requirements to ensure that the sale can be completed. In some cases, issues may arise that affect the title to the property, and if these are not addressed correctly, the sale may not proceed. Buyers and sellers will need to understand the different types of title issues that can play a role in a real estate transaction, and by working with an attorney, they can determine the best ways to address these matters.
Common Encumbrances and Title Issues
Some title issues that may affect the sale of residential property are known as “encumbrances,” and they involve a claim against the property by a third party. Other issues may affect the ownership of the property by the current owner or the ways the property can be used. Title issues that can arise during a real estate transaction include:
Liens - If a property owner owes money to a person or organization, a lien may be placed on their property, and these liens must be resolved before the property can be sold. These may include tax liens based on unpaid federal or state income taxes or local property taxes, mechanic’s liens used by a contractor or supplier to collect payment for work done on the property, or liens for unpaid child support or spousal support....