When buying a home in South Carolina, one of the most critical steps in the process is conducting a title search. The importance of a title search is often underestimated by buyers, but it plays a crucial role in ensuring a smooth and successful real estate transaction. Here’s why a title search is so important in a South Carolina real estate closing.
What is a Title Search?
A title search is a thorough examination of public records relating to the property in question. This includes information such as ownership rights, sales, current mortgages, taxes, judgments, liens, pending lawsuits, and anything else that may affect the property.
Why is a Title Search Important?
The purpose of the title search is to bring any potential issues to the attention of the buyer and seller so they can make an informed decision before pursuing the transaction. If the title search reveals an issue such as an existing lien or unpaid property taxes, the title is said to have a “cloud” on it.
Sometimes, a clouded title will simply delay the closing as the issues are cleared up and the cloud is lifted. Other times, a cloud on the title can kill the transaction entirely, as it can be too risky for the prospective buyer to purchase a title that’s not clear. They may find themselves on the hook for unpaid taxes, or responsible for liens and judgments that they had nothing to do with.
The Role of the Closing Attorney
In South Carolina, a real estate closing is a practice of law and, therefore, must be supervised by a licensed attorney. The attorney must review the title search, conduct the closing, record the legal documents, and disburse funds. Reviewing the title documents requires an attorney’s expertise to ensure there are no prior liens, encumbrances, or faulty conveyances and to guarantee that the buyer receives a title free and clear of any errors.
The Risks of Not Conducting a Title Search
Failing to conduct a title search can lead to serious consequences. For example, if a lawsuit has been filed that affects the title of a piece of property, a notice of “lis pendens,” Latin for “suit pending,” may be filed by an attorney with the clerk of the county where the property is located in order to alert anyone doing a title search of the pending suit.
Someone purchasing a property with a notice of lis pendens on it is bound by the outcome of the underlying suit as the new property owner. For this reason, many people will avoid purchasing a property with a lis pendens, and the transaction can fall through entirely.
Need Assistance with a Closing? We’re Here to Help
A title search is an essential part of any real estate transaction in South Carolina. It helps protect the buyer from potential legal and financial issues, and ensures that the property they are buying is free and clear of any encumbrances. If you’re planning to buy property in South Carolina, Boger & Peters is here to help with your closing. To speak with a member of our team about your closing, call (803) 252-2880 today.