What Is A Title Report? Do I Need One When Purchasing Residential Real Estate In Pennsylvania?
A title report or title search is essentially the proof of what title you would be taking if you were purchasing property or what type of title you own. Two questions should be asked when reviewing the title report:
- Are there any claims on the title that affect the ownership of the property or “clouds” on the title?
- Are there potential issues due to a non-owner occupant that legally possesses the title and ownership of the property owned by another person, or “adverse possession?”
If there are any claims or liens placed on the property or the current owner has a federal tax issue, and they haven’t been paying their taxes, then the IRS can put a lien on the property. As the buyer, that’s an essential piece of information you need to know. If you purchase the property as is, and the title and the condition it is, you now are the wonderful owner of an IRS lien that isn’t yours.
The lien would need to be taken care of at the time of settlement or before so that when you purchase the property, the lien would be satisfied and removed from the property. Therefore, as the new owner, you would have no obligation to pay the IRS for the previous owner. Short of doing a title search, things like this are not something you’ll know or be able to find easily. This is the purpose of the title search and report.
As a real estate attorney, Tom McLaughlin can obtain a title report. Tom has a title company and settlement company he works with, and they do all of his business. The title company and settlement company are very competent in their business. He has worked with and known them for many years, so he has no problem obtaining title insurance for a lien search or whatever his clients need.
What Do I Need To Know About An Inspection Of A Residential Property Before Buying Or Selling In Pennsylvania?
An inspection is one of the contingencies listed on the standard Agreement of Sale that’s often used in Pennsylvania. Most realtors use inspections, and Tom uses them as an attorney. The inspection document sets forth several inspection contingencies that you can elect. A home inspection is one that somebody can elect, and most times, borrowers or buyers will elect to have a property inspected mainly because the bank will require that.
The title insurance and the home inspection are things the bank will typically require to lend money. The home inspection is non-invasive, as Pennsylvania sets it forth. This means the inspector is not allowed to disassemble things. They can look and visually observe, but they cannot take something apart or try to pull something apart to see what’s behind or underneath.
The home inspector’s report is more fact and information-based, so the potential buyer or seller, or whoever is looking at the report, understands what the inspector believes is present at the property at the time of the inspection.
Typically, the buyer is the person who elects the inspection contingency and pays for it because it could help them negotiate a lower price after they see the inspection report’s findings. The inspection report can provide some comfort in knowing that what they’re buying is a worthwhile investment. The inspection tends to be more of a standardized type-form at this point, with checkboxes and spaces for dates, model numbers, and notes, but it’s still valuable information.
Along with the seller’s disclosure in Pennsylvania, the home inspection report gives the buyer the most extensive view of what they’re buying before they decide to make that investment. Both are set forth at the time of the Agreement of Sale.
Buyers need to know the following:
- If an inspection is elected, it applies.
- There are specific time frames and limits that the buyer will have to adhere to in the process of obtaining their inspection.
- There are time frames when presenting the inspection results to the seller.
- There’s a recovery limit for negotiating a resolution to any identified defects that buyers feel are misrepresentations.
A home or property inspection is critical. Sadly, sometimes things are overlooked or missed by the inspector. This can result in litigation or at least negotiations to try to resolve the difference. In their agreement to perform the inspection, many home inspectors have caveats in that limit for recovery that their customer (the home buyer) could obtain against the home inspector.
For instance, inspectors may say the recovery is capped at three times the fee paid for the inspection. In this case, if you spend $500 for an inspection, your ability to recover against that inspector is limited to $1,500.
Just about everyone knows that any significant home issue will probably cost more than $1,500. When the buyer finds out that the inspection missed something, they’re already at a loss. If contemplating litigation, the difference between the cost of litigation and trying to obtain the residual of the inspection may not make any sense worth pursuing.
For more information on Real Estate Title Report In Pennsylvania, an initial consultation is your next best step. Get the information and legal answers you seek by calling (717) 990-7178 today.