What is a Title Search?
A title search is a thorough examination of public records to verify a property's legal ownership and discover any claims, liens, encumbrances, or defects that could affect the transfer of ownership. The title search is conducted by a title company or closing attorney as part of every real estate transaction. It answers the fundamental question: does the seller actually have the right to sell this property, and will the buyer receive clear, marketable title?
The title search traces the property's ownership history through the chain of title, checking every recorded document that affects the property -- deeds, mortgages, liens, judgments, easements, and tax records. This process typically examines records going back 30-60 years, depending on the state and the title insurance underwriter's requirements.
What a title search reveals
A comprehensive title search examines multiple categories of public records. Deed records show the history of ownership transfers and confirm the current owner matches the seller on the contract. Mortgage records reveal existing loans and whether they'll be paid off at closing. Lien records identify claims from contractors, the IRS, state tax agencies, or judgment creditors. Tax records confirm whether property taxes are current or delinquent. Court records show any pending lawsuits, bankruptcy filings, or probate proceedings affecting the property.
Common issues discovered during title searches include outstanding mortgages that weren't properly released after payoff, mechanic's liens from unpaid contractors, federal or state tax liens, judgment liens from lawsuits, unpaid HOA assessments, unreleased deeds of trust, conflicting ownership claims from heirs or ex-spouses, and easements or restrictions that affect property use.
How the process works
When a purchase contract is executed, the title company opens a title order and assigns a title examiner to research the property. The examiner searches county records -- typically the county clerk's office, tax assessor, and district court -- for any recorded instruments affecting the property. This process takes 1-3 weeks depending on the county and the complexity of the title history.
The examiner produces a title commitment (also called a preliminary title report) that lists all findings. The commitment has three sections: Schedule A identifies the property, the proposed insured, and the transaction details. Schedule B-I lists requirements that must be met before closing (such as paying off existing liens). Schedule B-II lists exceptions -- items that won't be covered by the title insurance policy, such as existing easements or restrictive covenants.
Title issues in wholesale deals
Wholesalers encounter title problems more frequently than retail buyers because they often deal with distressed properties owned by motivated sellers. Properties in pre-foreclosure may have multiple liens. Inherited properties may have unclear ownership if probate was never completed. Properties owned by LLCs may have been transferred through complex entity structures that create gaps in the chain of title.
Understanding common title issues helps wholesalers evaluate deals before committing. A property with a straightforward title is easier and faster to close. A property with title complications may require additional time, legal work, or may be uninsurable. Asking the seller about liens, mortgages, and ownership history during initial conversations can flag potential issues early before you spend time and money on a deal that can't close.
Title search costs
Title search fees are part of the overall closing costs and vary by state and county. In Texas, a title search typically costs $200-$400 as a standalone fee, though it's often bundled into the title insurance premium. The seller typically pays for the owner's title policy (which covers the buyer), while the buyer pays for the lender's title policy (required by the mortgage company). In wholesale transactions, the contract specifies who pays which closing costs.