If you’ve finally found your dream home, congratulations are in order. Home ownership is an exciting time whether it’s your first home or simply your latest investment. If you’re beginning the steps toward closing on your home, you may have heard your real estate agent use the term “marketable” or “unmarketable” title.

 

For those unfamiliar with the term, this can sound a little confusing. But it doesn’t have to be with our title closing team at Liberty Title in Minnesota. Here’s what you need to know about marketable and unmarketable titles when you’re closing on your home.

 

Here are three terms you may hear used:

 

1.      Clear Title

A clear title is a title that is completely clear of all encumbrances. This means it will have no liens, no tenants on the property, no mortgage, no litigation, and no errors in the title. A clear title is free to be sold and has very little risk of litigation down the road.

 

2.      Marketable Title

A marketable title may not be completely clear, but it’s clear enough to be closed. Like a clear title, it’s unlikely to be the subject of a lawsuit down the road. Determining if a title is marketable can be done with a title abstract search to determine if there are any liens or judgments against the property. A marketable title is found to be reasonably clear. This is usually a title with a mortgage that will be removed at closing.

 

3.      Unmarketable Title

An unmarketable title is a title that comes back from a title search with defects. These can be due to liens or judgments against the property. They can include inconsistencies in information about the property on the deed or errors in the name of the property owner. If a title was filed under the wrong name, for example, it can be unmarketable. These defects must be cleared before the title can be considered marketable and the property sold.

 

Minnesota Buyer Title Insurance Protection

Whether you’re buying your first new home or picking up a great deal in a short sale, it’s important to protect your investment. That’s where our team of title insurance agents comes in. We offer title abstract service, legal advice, and title insurance.

 

We’ll work to help you protect your investment so you know your new home or property is protected as long as you need it to be. Connect with our title insurance team at 763.494.0340, or contact us to learn more about how we can help.