Transfer Clear Title

TLDR: A title company will conduct the title search, issue title insurance, and coordinate closing. If there are any issues with the title, they will need to be resolved prior to settlement. 

For an introduction to all things title, reference Step 2: Title and Title Insurance

What happens now?

The ratification of a contract spurs a variety of actions, which fall into two lines of effort: title and settlement, both of which are carried out by the title company and/or its affiliates. In a sentence, title work involves ensuring the new owner will have an unencumbered title, and settlement activities include all of the coordination to get to closing.  

Title work involves:

Settlement includes:

What are blemishes on a title, and what happens if they exist?

The purpose of a title search is to ensure that there is a sequential chain of title and that you legally possess the right to sell the property. However, sometimes there’s a break in the chain of title, or there are liens against the property that need to be resolved. Title issues are often called blemishes. Blemishes are claims to the title of a property and can impact a new owner’s rights, so it’s of critical importance for the title company to resolve any liens prior to the property transfer. Most lenders will only issue a mortgage on a clear and marketable title. 

Examples of Blemishes

Title Issues: The Kiss of Death

If any monetary title issues arise in the title search, you'll have to pay the outstanding debt to remove any blemishes before the property can be transferred. Refusal usually means the termination of the agreement as the lender won't loan on a property that can legally be claimed by another party.