National Abstracting Practices – FAQ – Frequently Asked Questions
If someone tells you they can “teach you all there is to know about abstracting,” they can’t. There are over 3,000 counties in the US with differing real estate records, but similar goals. To do a solid search, abstractors need local knowledge of the courthouse and local law. They need to recognize the newer computerized systems for searching and the layout and use of the traditional old books the Grantor-Grantee and the Grantee-Grantor Indices, the Tract Indices, Plat Books, and many others, all have a specific purpose and use. Title searching takes professionals.
The Principles of Abstracting National Edition course has looked at titles from across the country from New England to Hawaii and identified the most prevalent practices and procedures in searching titles. The class is a solid overview for those who work with land titles, Computerized Land Records Management (LRM), Geographic Information Systems (GIS), easements, roadways, utilities, or any who deal in real estate at the national level. It explains and ties together the overall search process of public offices for those who deal with land titles and covers the use of both Registered or Torrens Lands and non-registered or abstract lands.
Q: What is an Abstract of Title?
A: An Abstract of Title is a search of the recorded public records that affect a specific parcel of land. The purpose is to identify the owner of the property and all the claims, defects, and rights on the land so that buyers know what they are getting and what they are not getting when they buy.
Q: Do Abstractors have to be Licensed to do the Work?
A: That depends on your state. In Arkansas, Kansas, Minnesota, Missouri, North Dakota, Oklahoma South Dakota and possibly others, a license is must be issued by the state and there may be requirements for pre-license of continuing education, a bond and/or errors and omissions insurance. In other cases, on-the-job training will suffice.
Q: What Types of Documents are Found when Searching Title?
A: Deeds, taxes, assessments, mortgages and releases of mortgages are the most commonly found documents. Easements and restrictions on land are also common. Taxes and assessments affect all real estate. After that come hundreds of documents related to judgments, tax liens, bankruptcies, liens by contractors and sub-contractors, leases, probate documents, divorce decrees, unpaid homeowner association fees...the list is endless.
Q: Where Does an Abstractor Search?
A: Public Offices maintain records that affect title. The vast majority of states have a County Recorder office with property and name indices, a Tax Office, an Assessor Office, an Auditor Office, and a set of Courts for Bankruptcy, Federal Judgments, and District Court Judgments. No easy feat to search. In addition, there are state and local rules for other liens that must be searched.
Q: What is an Examination of Title?
A: A title examiner studies the public records search to identify the ownership and rights in real estate. The examiner, who may also be the abstractor, describes the defects or claims against ownership and what action is needed to clear title to the property for closing.
Q: Does an Abstract Show All Claims on Land?
A: No. The law recognizes three forms of the legal notice on real estate actual, constructive, and implied. Actual notice is where you see, hear, or know about an issue. For example, if you go to the site and see a contractor installing new windows you have actual notice that work is being done and should know the contractor needs to be paid. Constructive notice refers to the fact that the public is charged with recording deeds, mortgages, easements, etc. to let the world know they have a claim. The implied notice says a prudent person, finding information about the property should ask questions. For example, if a buyer sees evidence of a renter in the property s/he is about to buy, with the renter's name on the mailbox, that question should be raised.
Q: Does an Abstract of Title with Title Exam Guarantee My Title?
A: No. Even with a spot-on abstract and perfect title exam, there can be serious title problems due to fraud, forgery, errors in recording, etc. The seller could have been senile, incompetent, or under duress when a deed was signed. Perhaps a marital interest was not disclosed. People with similar or common names could mistakenly affect title. None of these would be discovered with a title search.
Q: How Often is a Title Search Done?
A: Titles are a snap-shot-in-time. They change daily, as people get married, divorced, take out mortgages and lines-of-credit, remodel or repair the property, don't pay taxes when due, etc. So, the title needs to be searched each time a property is mortgaged, sold, or other rights like easements or mineral rights are being purchased.
Q: How Can One Assure that Title is Good?
A: Title insurance is a form of indemnity insurance that protects lenders and homebuyers from financial loss sustained from defects in a title to a property. If there is a title problem, the Title Insurance Company will work to correct the problem, or worst case, if a problem is irreparable, (forged documents?) they will pay you the face amount of the policy, so you suffer no monetary loss. For a one-time fee, it can be invaluable. I compare it to fire insurance. You hope you never need it, but it's a life-saver if you do!