Selling a house is a convoluted process. In Washington, the potential for title issues (e.g., liens, unpaid taxes, property disputes) further complicates matters, sometimes scaring away potential purchasers. Every seller photoshops their home and it takes weeks before they can hope to collect a full album’s worth of killer whale shots. Knowing what conditions could default, that prospective purchase of your place, ensures that you know precisely what is expected of you (as Washington law states, following its books of RCW’s). The “previous problems,” which could still take some time (hence affecting your pricing), also have a direct bearing on the probability of sale, as the purchaser will (at the time) wish to take out insurance against that potential. “Previous problems” (which are not overcome by title, wills, or probate) can and will also affect the terms of that particular policy. By going through the following how-to—i.e., how to “do-it-yourself”—people will learn more about what ails them! Watch this space—to discover more about what such “title title” problems could do—both to that price; its purchaser’s power; plus, their attorneys’ preference.
Understanding Title Issues When Selling
Property title issues are legal issues that can arise regarding the ownership of a property. These types of issues can appear as liens, encumbrances, or disputes over the boundary lines of the property. A lien is a claim someone has to a property until a debt is paid off, while encumbrances are claims on the property such as easements or specific restrictions on what may be an allowed use of the property. Boundary disputes can rear their heads when neighboring parcels disagree about where the boundary between their properties actually is. In each case, these issues end up being a headache and some cards that have to be dealt with at one time or another.
One reason why it will have to be dealt with when you try to sell. These types of issues can cause houses to stay on the market much longer or have trouble with the financing process of the buyer’s side, where the mortgage company will require the title to be clear before closing. Also, it may leave prospective buyers wondering too much about why these things were not dealt with ahead of time, and then the risk may get baked into the offer price. Sellers need to envision which of these issues may come into play and take care of them beforehand. “Sellers can expedite a sale and possibly get a better price by securing a clear title, so it is an essential step to sell a home.”
Common Title Issues in Washington Real Estate
Title issues in Washington are obstacles to smooth, predictable transactions. The following are a few of the most common title issues around the state:
Liens: A lien is a legal claim against a property. If a homeowner has debts — such as past residential work that a contractor has completed, unpaid taxes, or a default on their mortgage — they may have an existing lien on their property. Liens must be paid before a home can change ownership. Buyers may be forced to pay for back-taxes or other municipal fees before closing, which can be stressful and expensive.
Boundary disputes: Although there are laws in place to prevent situations of this nature, it’s possible for property lines to move over time, official surveys to produce conflicting results, or new residents to settle into their new build and decide their driveway is not, in fact, all their own—or the fence that was obviously the delineator simply isn’t. By definition, a civil crime is a disputed wrong that is in direct conflict with someone else’s personal interests.
Inherited property complications: It’s less common than other issues, but it’s not totally out of the question to have multiple family members or other heirs become known.
How to Sell a House with Title Problems
To understand the trickiness of selling a house with title issues, it’s helpful to break down the process step by step.
First, you will need to research your home’s title to get a clear understanding of any and all outstanding items. This can include city, state, or federal tax liens; claim/lien from a general contractor or subcontractor; out-of-date child support claims; discrepancies in home ownership, and any number of other encumbrances similar to these that could cloud the home’s title.
When title issues arise, you will likely need to involve an attorney. A real estate lawyer and/or title company will be able to guide you through the legal requirements and all associated costs and timeframes needed to officially clear your home’s title. This process could take anywhere from a few weeks to several months, depending on the number and type of claims against your home’s title.
Also, you could sell your property “as-is” with the existing title problem(s). That way, the future buyer would be able to make an informed home-buying decision on whether or not they are up for the challenge of assuming the problem.
When you do enter into these types of discussions with buyers, it will most likely be best to approach the point of negotiation about your home by being responsive and taking a needs-based approach.
Resolving Property Title Issues
Clearing any common title problems will help ease the sale or purchase process. Oftentimes major problems come from unresolved liens. These liens occur when the current property owner has unpaid debts or obligations. To clear these liens, figuring out how much is owed and to whom can be a big enough problem because it often involves negotiation with those who are unpaid and settling those debts.
A secondary, but no less important, issue comes from disputes regarding ownership or property borders. The extent of the disputed property can be difficult to prove on its own because of the potential for unclear property lines, or having more than one owner on record for a portion of the property. When/where the disputed property is actually something handled with the help of a survey or through historical property records.
Obtaining additional documentation is another must. One of the biggest things here is having a professional, like a title company, perform an actual title search. These organizations clear up a lot of the possible murky water by providing a straightforward title report, or putting together all the necessary paperwork to transfer the listed title to your name.
The Role of Title Insurance
Title insurance is a type of insurance that protects buyers and lenders of real estate from financial loss stemming from defects in a property’s title not discovered during the initial title search, including things like liens, encumbrances, or disputes about ownership.
For buyers, it’s nice to know that you have protection for any potential claims on your property that will come up after you buy. Buying a home or property should be a fun and exciting experience. The last thing in the world that you want to worry about is any financial loss from your purchase.
Selling a property can be a pretty straightforward process and is done all over the United States every day. If you are a seller, you should definitely ensure that you have title insurance, especially if you have an inkling that the property you are selling has any title issues whatsoever.
In the unfortunate event that something happens with your property, if a person ever comes up and makes a claim about the title of your property, legal fees and any headaches associated with these issues should be the least of your issues. The title insurance company will usually cover legal fees and financial loss from having to give away the property, so you’ll be in light spirits trying to get over losing your property or house.
In the world of real estate, proactively addressing title issues may be the one thing that makes or breaks a deal. There is a multitude of origin points for title issues. Any liens against a property, discrepancies on the quitclaim deed, debates over property boundaries (see: fences), or any sort of unresolved claim from a previous owner has a chance to surface through the title process. Frustration, listing/remove from listing, failure to sell, or complete collapse of a transaction can occur for both parties as a result. Address these issues up front and they won’t be issues.
I have only two words here: CONSULT. PROFESSIONALS. Find a real estate broker who doesn’t need a real estate dictionary and a title company that does a great job. They will be able to look through any current or past title discrepancies and give you a pretty good idea of any problems that are going to come up. I would even recommend it (if not already done) go ahead and getting a title policy pulled and resolved (i.e., removing the need to be pulled again by the buyer). It’s a cost that will need to be met anyway (except in a few rare cases), but it shows that the buyer billing is already handled. It helps to erase any fear of a title issue with at least a handful of buyers at the table.
Many investors, including those in the real estate syndicate market, and real estate property owners key in on what they are (or should) know best – price. Keep in mind that an under contract property price can quickly jump for one reason – the title is cleared. The path of least resistance includes correctly funding the highest marketed house. Less risk negotiation of alternatives (not necessarily a higher-rated comparison price, or loan cost associations analyses, can materialized the value more quickly at specifically a sell-it price). In other contexts, investors and home buyers shouldn’t use this strategy when flipping homes or building a real estate portfolio. This way can help them sell their product or service more smoothly and allow them to create a market in which they are at the center. They can then sell successfully.