Getting pre-qualified for a mortgage, finding your dream property, and having your offer accepted is exciting—but it’s only the beginning of a successful real estate transaction. One of the most important steps on the way to the settlement table is obtaining an abstract of title.
What is an Abstract of Title?
An abstract of title is a legal document that states the current and historical ownership of a piece of property. It is the written chronology of all recorded documents and proceedings related to a specific piece of real estate that includes the names of all previous owners, what each paid for the property, how long they held the title, and more.
Why is Having an Abstract of Title Important?
Obtaining an abstract of title is critical to real estate agents, buyers, sellers, land surveyors, banks, attorneys, and settlement companies because it is essential to closing a property transfer. Without one, there may be surprises at the closing table which allow room for last-minute negotiations, and the buyer or seller may then back out of the sale. However, a thoroughly detailed abstracting process ensures all parties involved, the title on the property is clear, and it minimizes the likelihood of last-minute issues happening at closing which potentially risk stopping the transfer. An abstract of title ensures that the property is eligible to be sold. It reveals if any others have an interest in the property or may have reason to challenge the buyer’s ownership in the future.
What Information is the Abstracting Process Based On?
- Mortgages/Liens for loans, property taxes, homeowners’ association fees, and dues.
- Plat maps and lot/block diagrams clearly show the dimensions and locations of property lines.
- Surveys: Are there any encroachments over these boundary lines?
- Easements: Are there restricted areas on the property which must be observed?
- Covenants/Homeowners’ Association Restrictions spell out what the owner can and cannot do with the property. Are their current infractions?
Why is the Abstracting Process Important for Real Estate Agents?
In Maryland, real estate agents typically represent the buyer unless special arrangements are made. Therefore, it is the real estate agent’s responsibility to protect their client from future financial or ownership problems, including those resulting from title defects. From outstanding liens to inaccurate legal descriptions to pending judgments, an abstract of title will reveal these defects, allowing the process of “clearing” the title to begin before the keys are handed over at settlement.
Why is the Abstracting Process Important for Sellers?
To ensure a smooth transfer of a property, sellers need to know as soon as possible if there are any issues with its title. Most importantly, a title search ensures sellers that they have the right to sell the property, or if there are any debts or interests against the property that must be resolved before the transaction can take place.
For over 60 years, Montgomery, Frederick, Carroll, Howard, and Washington counties have turned to Real Estate Title Services for their agricultural, commercial, industrial, residential subdivision, easement, estate work, and other land-related search inquiries. Whether you’re seeking a limited or a full-title search, find out how Real Estate Title can help your team or project at https://retitleservice.com/contact-us