The title search is an incredibly important aspect of commercial real estate acquisition, and you need to know that the process is done correctly. Not only can a poor title search greatly complicate your purchase, but it can negatively affect your finances in a number of ways. Below, we explore all the ways that you can end up in a financial hole because of an ineffective title search.
How Ineffective Title Searches Hurt Your Finances
As we’ve talked about on the blog in the past, there are a few different ways you can conduct a title search ahead of purchasing a new commercial property. The most common way is to outsource the process to a professional title service company like Commercial Partners. Their team has decades of experience researching properties and records systems to uncover a wealth of information about a title. If you try to perform this search on your own or you go with a subpar company, it can really hurt your bottom line. Here are some of the hidden costs of an inefficient title search:
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Missed Issues - The most obvious way that an ineffective title search can hurt your finances is if key issues are missed during the search. If you try to research a property on your own and end up purchasing the property from someone who did not have the legal right or even the ability to sell the property (like someone who co-owns the property or a scammer who doesn’t actually hold the title), you can lose your money and end up not owning the property. Even if smaller issues are missed, there’s the possibility that you could have used these factors as negotiation chips when coming to a purchase agreement, meaning you may end up paying more for a property than you could have if you factored these issues into your offer.
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Opportunity Costs - If you are bogged down conducting a title search, or you choose the cheapest title company you can find online, you may spend a lot more time sorting out the title issue than if you had outsourced it to another company. If you’re spending hours researching a property or trying to get information from a company who isn’t great about communicating with their clients, it takes time away from other things you could be doing. Time is money in the business world, and if you’re stuck wasting your time on title issues, you’re missing out on time that could be better spent on other duties.
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Pay To Fix Your Mistakes - Let’s say you pay for a title search program or you hire an ineffective company to perform your search, and eventually you realize you need to outsource this job to someone else. You’re not going to be able to get back the money you already spent. Had you just gone with a trustworthy firm from the gates, you wouldn’t be out the cost of these less effective methods.
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Lost Purchase - Finally, without an effective title search, there is a possibility that you won’t take care of what needs to be done in order for the sale to go through. You may forfeit your earnest money or miss out on a lucrative commercial venture because you didn’t have the title search conducted by a team of professionals who know how to do the job correctly the first time. Don’t let the sale fall through because of an ineffective title search.
To ensure that your title search is conducted thoroughly, correctly and on time, outsource the process to the team of professionals at Commercial Partners. We’ve conducted thousands of title searches for all sorts of commercial properties, and we won’t leave any stone unturned when it comes to clearing a title. To put our services to the test and protect your financial interests, reach out to our team today at (612) 337-2470.