What Texas Buyers and Sellers Need To Know About Cloudy Title

What Texas Buyers and Sellers Need To Know About Cloudy Title, continue reading our article below…

Cloudy title is a term you might not hear often until it affects you. When it does, it can ruin a sale right before it’s supposed to happen. To protect yourself as a Texas buyer or seller, it’s crucial to know what a cloudy title is, how to avoid having one, and what to do if you find out the house you want to buy or sell in Texas has a cloudy title.

WHAT IS A CLOUDY TITLE?

A cloudy title, also known as a cloud on title, means there are issues that might cause problems with owning a property or make it unclear who owns it. These issues could include documents, debts, or claims that challenge ownership. Cloudy titles happen when there are unresolved problems with a property, like if there were repossession proceedings before it was sold, or if there are debts the owner agreed to pay.

If the person selling the property didn’t pay for work they hired someone to do, like construction or development, there might be a mechanic’s lien on the property. This lien lasts until the money owed for the work is paid, or until there’s a legal solution.

If the seller inherited the property, probate problems can also make the title cloudy. This occurs when the property owner died without clearly stating who should inherit the property, or if there are missing documents, like death certificates, that make it unclear who owns the property.

Fraud is another, less common, issue that can make a title cloudy. If someone creates a fake deed and it’s recorded as a real one, it can be unclear who actually owns the property.

HOW CAN I PROTECT MYSELF FROM CLOUDY TITLE AS A SELLER?

If you’re selling a property, the easiest way to find out if there might be a problem with your title is to have someone do a title search before you put the property up for sale.

During most home sales, a title search is done to check for any problems with the property’s title. Finding out about these issues before you start selling gives you time to fix them by getting quitclaim deeds, paying off debts, or taking legal action.

Beginning this process before you have an offer can save you a lot of time and stress.

HOW CAN I PROTECT MYSELF FROM A CLOUDY TITLE AS A BUYER?

As a buyer, it’s hard to know if there will be problems with a cloudy title on the properties you want to buy. During the sales process, a title search will be done on any properties you’re thinking about buying.

In some cases, you can solve a cloudy title by having the seller pay debts to a contractor or by getting a quitclaim deed. But not all situations are that simple to fix.

To stay safe if there’s a cloudy title, don’t rely solely on one property for your purchase. If you think there might be title issues with a property you’ve made an offer on, keep searching until you find one with no problems.

As a buyer, you’re not responsible for anything regarding a cloudy title, but it can definitely mess up your plans to buy a home without any warning.

If you worry about cloudy titles and the Texas home buying or selling process, trust our team of professionals to help you through the process. Contact us today at 512-230-3469!