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Title defects can delay your real estate transaction

If you are buying or selling a residential property in Arizona, you will be reviewing and signing a lot of documents. For a transaction to run smoothly from start to finish, everything must be in good order. It’s not uncommon for obstacles to arise during a real estate transaction, such as a title defect on a residential property.  

Do you know that it’s possible to buy a house and go to closing only to learn that you are not the rightful owner of the home? This type of real estate disaster can occur if there is a title defect on a property. This would mean that the person who sold you the home did not legally have a right to do so. It’s important to know where to seek immediate support if this type of problem arises, whether you’re the seller or buyer.  

What are some reasons why a title defect might occur? 

In certain circumstances, such as if there is a lien against a property, the person listed on the title of a home might be prohibited from selling it. Any legal judgment that gives someone other than the person listed on a title claim over a property creates a title defect if the person named on the title attempts to sell the property. 

Another reason why a title defect might occur is if the person selling you a home owes property taxes or has not paid his or her utility bills. In such cases, the governing authority has a right to collect the debt. Until that is done, there is a lien on the property. Another way to think of this is that ownership has been restricted. Additional issues that can cause a title defect, include forgeries, undiscovered wills, bankruptcies or errors in a public record. 

Most lenders require title insurance 

If you’re in the market for an Arizona home and are seeking a lender who will approve a mortgage loan for you, that lender will no doubt require you to purchase title insurance to protect their interests. If you wish to sell the home, a title search is conducted to reveal any defects that may exist.  

If there is a lien on your property, this will show as a title defect during the title search. In such cases, you, as the borrower, would have to resolve any and all issues causing a title defect before you can sell the home.  

What does it mean to ”cure” a title? 

When you buy a house in Arizona and a title search is done, if there are defects, the title must be cured before you can become the rightful owner of the home. Depending on what exact issues have caused a defect, it could take days, weeks or even months to cure the title.  

The best way to avoid such problems is to make sure there are no title defects before you take possession of the title. It is helpful to seek assistance from someone who is well-versed in Arizona real estate laws to protect your interests when buying or selling a home.  

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