What Is a Clear Title?

A clear title in real estate is a term that refers to any title that is free from legal rights or is not at risk for property seizure from loan providers. Someone who completes all payments on their mortgage will then have a clear title to which no one else can take ownership of the property.

An outstanding balance is not the only factor that makes a title not passable to be called “clear.” Any legal issues of the property, error in the survey, code violations with unpaid penalties, and all other problems are all factors for a title to not be considered “clear.”

When is a clear title needed?

A buyer needs to check the chain of title before they buy a property. Purchasing an estate with any existing claim is very risky for future legal disputes. Title researchers specialize in this matter and the process they do to see if a title is clear is called title search.

Furthermore, if a person fails to come up with a clear title upon selling their property, the estate in question might not qualify to be listed on the market. The case is the same for those who want to have their homes refinanced. Hence, it is very important to have a clear title.

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