You know what nobody tells you when you’re dreaming about buying that perfect home? All the weird stuff that can go wrong with the title. Yeah, that boring legal document that says who actually owns the property. It turns out this little piece of paper can cause some giant headaches.
If you’ve ever bought a house, you probably remember signing a mountain of papers without really understanding what most of them were for. One of those was about title insurance. At the time, you might have thought “Do I really need to pay for this?” Well, let me tell you a story that might change your mind.
My friend Chris found his dream home last year. Great neighborhood, good schools, perfect kitchen for his cooking hobby. The inspection went fine, financing was approved, everything looked good to go.
Then, two weeks before closing, boom. A title search revealed that the previous owner’s ex-wife still had partial claim to the property from a divorce settlement that wasn’t properly recorded. The sale ground to a halt while lawyers sorted it out. Jake almost lost the house.
Crazy, right? But stuff like this happens all the time.
How Title Issues Can Complicate Real Estate Deals
Title problems crop up in about 25% of all real estate transactions according to the American Land Title Association. These issues can delay closings, increase costs, or even kill deals completely.
Errors in Public Records
So let’s start with the most common problem: mistakes in the public records. County clerks are human, and humans make mistakes. Names get misspelled, documents get filed under the wrong address, numbers get transposed.
A study from 2022 found that around 15% of property records contain some kind of error. Most are minor, but some can create serious questions about who owns what. Imagine buying a house only to find out later that the legal description covers just half your yard because someone mistyped a boundary line 30 years ago.
Unknown or Unlocated Heirs
This next one sounds like something from a TV drama, but it happens more than you’d think. Someone dies, their will gives the house to their son, who sells it to you. Great, except nobody knew about the daughter from a previous marriage who legally owns half the property.
Family drama becomes your drama when unknown heirs show up claiming ownership. About 8% of title issues involve missing heirs or inheritance problems. These cases often take months or even years to resolve.
This is especially problematic in situations involving interstate succession in Texas, where state laws dictate how assets are distributed among relatives.
These laws can lead to prolonged disputes and title uncertainty when multiple heirs claim ownership, particularly if some reside out of state or cannot be located.
Unpaid Liens and Mortgages
Debts can follow a property, not just a person. If the previous owner didn’t pay their property taxes, guess who the government will come looking for? Yep, the current owner. That’s you.
The same goes for contractor liens, homeowners association fees, and sometimes even utility bills. A 2023 report showed that about 32% of title problems involve unpaid liens or mortgages that weren’t properly discharged.
I once heard about a guy who bought a fixer-upper only to learn that the previous owner owed $43,000 to contractors who had filed liens. Since he hadn’t done a proper title search or gotten title insurance, he was stuck with the bill. Ouch.
Chances of Forgery and Fraud
This one’s scary. Someone forges a deed, pretends to be the owner, sells you the house, takes your money, and disappears. It sounds like a bad movie plot, but it happens.
The FBI reports that real estate fraud has increased by about 42% in the last five years.
Technology makes document forgery easier than ever, and remote closings during the pandemic created new opportunities for scammers.
Unreleased Mortgages
Sometimes a homeowner pays off their mortgage, but the bank never files the release paperwork. Years later, when they try to sell, the title search shows an old mortgage still hanging around like that one party guest who won’t leave.
About 11% of title issues involve unreleased mortgages according to industry data. Fixing them usually means tracking down paperwork from banks that might not even exist anymore.
Boundary Disputes
You think your property line runs to that big oak tree, but your neighbor’s survey says it’s actually 10 feet closer to your house. Now what?
Boundary disputes account for about 17% of all property title issues. They’re especially common in older neighborhoods where original survey markers have been moved or lost. These disputes can get ugly fast, turning friendly neighbors into bitter enemies arguing over inches of land.
A couple in Oregon spent over $100,000 in legal fees fighting over a strip of land worth maybe $5,000. Neither one would back down, and both ended up losing money. Don’t be like them.
How to Resolve Title Issues
Okay, so title problems happen. Now what?
Here’s how you can tackle them.
Clearing Liens and Encumbrances
If you find liens on a property you want to buy, you have options. Often, the seller can pay them off from the proceeds of the sale. For smaller liens, you might negotiate a lower purchase price to cover the cost of clearing them yourself.
For existing homeowners, the process works like this: find out exactly what’s owed, negotiate a payoff amount if possible, make the payment, and get written confirmation that the lien has been released. Then make sure the release gets properly recorded with the county.
A woman I know found out her home had a $7,200 contractor’s lien from work done by the previous owner. She called the contractor, learned they’d never actually finished the job, and negotiated the lien down to $3,500. Three phone calls saved her thousands.
Correcting Public Record Errors
Fixing mistakes in public records takes patience and persistence. You’ll need to gather evidence proving the error, file correction paperwork with the right government office, and follow up repeatedly.
The process varies by location, but expect to spend time gathering old deeds, surveys, tax records, and other documents to support your case. About 70% of record errors can be fixed within 30 days, but complex cases may take much longer.
Engaging Legal Counsel
Sometimes you need a pro. A good real estate attorney can spot issues you’d miss and knows how to navigate the legal maze of property law.
Attorney fees typically range from $150 to $350 per hour for title work. That might seem steep, but it’s way cheaper than losing your home or getting stuck with someone else’s debts.
Find someone who specializes in real estate law, not just a general practice attorney who handles the occasional property case. The difference in expertise can save you thousands.
Dispute Resolution Mechanisms
Not every title issue needs to end up in court. Mediation and arbitration can resolve many disputes faster and cheaper than litigation.
A professional mediator typically charges $1,000 to $3,000 for property disputes, compared to the $20,000+ you might spend taking a case to trial. Plus, the process usually takes weeks instead of years.
Some title insurance policies even cover mediation costs for covered claims. Speaking of which…
Title Insurance Claims
If you have title insurance and discover a covered problem, file a claim! That’s literally what you paid for.
The claims process typically works like this: notify your insurer, provide documentation of the issue, and work with their claims adjuster. The insurance company may pay to resolve the problem, cover your legal costs, or compensate you for losses.
About 3-5% of title insurance policies result in claims, with an average payout of around $4,500. But some claims run into the hundreds of thousands of dollars. Not a bad return on a one-time premium of maybe $1,000.
Preventative Measures to Avoid Future Title Issues
An ounce of prevention is worth a pound of cure, especially when it comes to title problems.
Conduct a Thorough Title Search
Before buying any property, get a complete title search. This isn’t just checking who owns it now, but digging through decades of records to find any potential problems.
A basic title search costs about $75 to $200, while a more comprehensive search might run $300 to $600. Money well spent when you consider the alternatives.
Don’t just take the title company’s word for it either. Ask questions about anything unusual in the title report. Those boring exceptions and exclusions listed in the back? Actually read them. They might tell you something important, like the fact that your dream home sits on land where the neighbors have a right to drive across your yard to reach their property.
Obtain Title Insurance
There are two types of title insurance: lender’s policies (which protect the bank) and owner’s policies (which protect you). If you’re getting a mortgage, the lender will require their policy, but the owner’s policy is usually optional.
Get the owner’s policy. Seriously. It typically costs about 0.5% to 1% of the purchase price and covers you for as long as you own the home. You pay once, and you’re protected for decades.
About 85% of homebuyers get owner’s title insurance according to industry data. The other 15% are taking a huge risk to save a relatively small amount of money.
Engage Real Estate Professionals
Working with experienced real estate agents, attorneys, and title companies can help spot potential issues early. Yes, these professionals cost money, but they’ve seen it all before and know what to look for.
A study from the National Association of Realtors found that homes purchased with agent representation were 50% less likely to experience title problems later. Why? Because good agents know which title companies do thorough work and which ones cut corners.
When choosing professionals, ask specific questions about their experience with title issues. How many have they dealt with? How were they resolved? What do they look for during transactions? The answers will tell you a lot about their expertise.
Conclusion
Title issues are like termites in your home’s legal foundation. They might be hidden for years, but once discovered, they can threaten the entire structure of your ownership.
The good news is that most title problems can be solved with time, money, and the right help. And many can be prevented entirely with proper due diligence before purchase.
So next time you’re buying property, don’t skimp on the title work. Those boring legal details might not be as exciting as picking out paint colors or planning your furniture layout, but they’re what ensure the house actually becomes yours.
And if you already own a home but skipped some of these steps? It might be worth getting a title search now, just to make sure there aren’t any surprises lurking in the county records. Peace of mind is worth a lot, especially when it comes to probably the biggest investment you’ll ever make.
