There’s a title and then there’s an abstract of title. The two are definitely related but serve different purposes.
If the title on your home is the Cliff’s Notes, the abstract of title is the unabridged chapter book.
An abstract of title is a written history of a piece of land and includes all the recorded documents and proceedings related to a specific real estate. It shows the names of all the owners, how long each held title, and what each paid for the property.
An abstract of title also includes:
- Open mortgages, lawsuits, judgments, liens, wills, as well as information reflecting property tax status
- Accuracy of its physical description and the integrity of its title
- Refinancing transactions within the last 10 years
- Assurance that the property is just as the seller represents it
- Potential original land grant or patent deeds
- Potential mineral rights
While the typical title search only goes back a restricted number of years, an abstract of title can go back to before the house was built, to the earliest available records. It might possibly even include the original grants or deeds from the U.S. government.
Depending on the age and location of your house, an abstract of title could include information on mineral rights. That means if the property is sitting on an oil well, natural gas or silver mine, the profit could all be yours.
Who creates an Abstract of Title?
An abstractor is the person who researches this title history, summarizes the relevant documents, and certifies your abstract of title binder as true and complete.
Even from early American history, the first abstractors were attorneys. In Louisiana, it pays to have a knowledgeable real estate title attorney licensed by the state board to manage these documents as it takes analytical skills and practical experience to filter out false or void records. A real estate title attorney is the most qualified person to pinpoint properties that unlawfully changed hands due to improper handling at sale of the home or death of the owner.
What’s an example of how an Abstract of Title can save my sale?
- Mortgages and liens. Liens for property taxes, mortgage loans, child support, homeowners’ association dues or any other outstanding expense must be resolved or a clean title is impossible.
- Wills, deeds, lawsuits, or tax sales. Did Aunt Myrna correctly leave her home to cousin Denny? Or maybe cousin Jimmy sued Cousin Denny believing the house was actually his and the lawsuit never settled? Maybe both cousins owned the home but neither paid the taxes. You have to know these details upfront or be liable for the possible fallout.
- Surveys. Any encroachments, such as sheds or fences over the property line should appear in the surveyor’s notes and need to be cleared ahead of a sale.
- Easements. Right of ways or utility access is important to know from the beginning. In fact, you could be restricted from certain areas on your property (or what you believe to be your property) when it actually belongs to the state, the local municipality, or another property owner.
- Subdivision restrictions. The buyer needs to know what can and cannot be done with a property.
- Previous ownership. Not that this will sink your sale, but it’s purely a bonus that the abstract may reveal your property’s connections with significant historical figures. It’s fun to see the research on early names of a property as well as the construction and renovation dates.
An abstract is great peace of mind. If all this seems unnecessary – maybe the home isn’t very old or you know there have only been two other owners – then a more basic title search could be all you need. Either way, title insurance is your best option to save you from any issues that could pop up with previous owners, sales, or liens on the property.
Since a title company is your last line of defense when you buy a home, you’ll need one with a solid reputation and proven track record. You want a full-service firm that can handle titles, abstracts, insurance, and more. You want only the best.
Clean Title, LLC, is researching the past to protect your future!
We’re proud of our track record and the recommendations our clients have shared. (Check out some of our reviews on our Facebook page).
With a blend of exemplary service and professionalism, we ensure our clients know exactly what’s happening every step of the way. We want you to feel confident that when you sign on the dotted line, you’ll be turning a house into a home.
Check out our home buyers’ Clean Title FAQs and reach out at 985-277-5095 anytime with questions!