Whenever you are buying a piece of real estate, you should have the title searched by a professional abstractor. This is one area where you don't want to cut corners and do it yourself. As with anything you do in business it pays to understand how your local courthouse works and how a title is searched. This type of information can help in discussing various items that a comprehensive title search may reveal. A search will reveal any liens, judgments, or debts owed against a property that are of public record. It will not reveal any pending liens or non-recorded items. Title insurance companies will issue a title insurance policy based on the results of the search.

The one thing to remember with title insurance is that the first page normally lists what is covered and the second page lists exceptions. Exceptions are parts of the title that the insurance will not cover. Most of these are boilerplate items, but anything typed in should be discussed with the closing agent to ascertain what you are not covered against. Title insurance is the only insurance that insures against problems that occurred in the past.

When buying a piece of property the first thing you should do after it is under agreement is have the title searched. Do not spend one dime on the property till you know the condition of the title. I don't know how many times I thought I had a killer deal only to find I had bad title. If you deal with distressed ugly houses title problems are the rule not the exception.

A few things can be done to save some money when checking the title. Always request a present owner search first before you have a full search done. Most abstractors will charge a quarter of the cost of a normal search for this service. It has been my experience that the majority of problems that occur will be with the present owner. If they check out, then have the abstractor complete the rest of the full search. Using this method will save you a lot of money and time because you can eliminate problem properties for a quarter of the cost.

When working with foreclosures I suggest have to separate title searches. The reason for this is most foreclosures are littered with liens and judgments. It is very easy to miss something. If a party to the foreclosure is missed being name it could result in having the whole foreclosure done over. When do you think you will find this out? When you have a buyer sitting across from you at the closing table. Which brings me to my last tip on title insurance.

Use whomever you bought title insurance from to do the closing when you sell the property. They will not go back and redo all the title work. They will do what is called a "bring down". Which means they will only search from the time you bought your insurance from them till the present. No new stuff will show up unless you put it there. This is probably the best way to eliminate problems.