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You’re getting ready to sell your home. The buyer has been approved for their mortgage, the moving boxes are packed, and closing day is approaching.
Then you hear two words no seller wants to hear: title problem.
While title issues can be stressful, many can be resolved. Understanding what they are and addressing them early can help keep your Massachusetts home sale on track.
What Is a Title Problem?
A title problem is an issue involving the legal ownership of a property or a claim against it.
Before closing, a title examination is typically performed by a closing attorney to identify mortgages, liens, and other matters that could affect the transfer of ownership.
If something unexpected appears, it will need to be addressed before the sale can move forward.
Common Title Problems in Massachusetts
Some examples include:
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Missing mortgage discharges: A previous mortgage was paid off, but the paperwork releasing it was never properly recorded at the Registry of Deeds.
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Outstanding liens: Unresolved claims against the property, such as certain tax or judgment liens.
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Errors in recorded documents: Mistakes in names, property descriptions, or other information in the public records.
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Ownership questions: Issues involving prior deeds, estates, or individuals who may have an interest in the property.
One of the most common examples is a missing mortgage discharge.
What If My Mortgage Was Already Paid Off?
Just because you paid off a mortgage doesn’t necessarily mean the Registry of Deeds records show that it was released or discharged.
When a mortgage is paid in full, a discharge or other appropriate release generally needs to be recorded at the Registry of Deeds.
If that release is missing, the old mortgage may still appear in the property’s title history.
In some cases, the issue may be as simple as locating an existing discharge and recording it. Other situations require additional work with the lender or assistance from an attorney.
The important thing to remember is that a paid-off mortgage showing up on title doesn’t automatically mean you still owe the money. It may be a paperwork issue that needs to be corrected.
Can a Title Problem Delay Closing?
Yes. Depending on the issue, a title problem may delay closing while the parties determine how it can be resolved.
For example, an attorney may need to obtain missing documentation, contact a previous lender, or investigate an inconsistency in the property’s ownership history.
Some problems can be corrected relatively quickly. Others may take additional time.
In certain circumstances, alternative arrangements may be possible, but they depend on the particular title issue and the requirements of the parties, lender, and title insurance company.
How Can Sellers Avoid Last-Minute Surprises?
Although not every title problem can be prevented, sellers can take a few practical steps:
Get organized early. Keep copies of mortgage payoff letters, discharges, deeds, letters from your lender, promissory notes marked “paid in full,” and other important property records.
Mention unusual circumstances. If the property was inherited, transferred through a trust, or involved a prior ownership dispute, tell your attorney early in the sale process.
Address known issues right away. If you already know about a lien or missing discharge, don’t wait until closing week to raise it.
Consider involving an attorney early. Legal guidance can help identify what needs to be resolved and coordinate the necessary steps.
The earlier a potential issue is identified, the more time there may be to address it before closing.
Frequently Asked Questions
Can I sell my house if there’s a lien on it?
Possibly. Some liens can be paid and released as part of the closing process, while others may require additional steps. The answer depends on the lien, the transaction, and the terms of the Purchase and Sale Agreement.
Who is responsible for fixing a title problem?
Generally, the seller is responsible for delivering clear, marketable title to the buyer, as required by the Purchase and Sale Agreement. However, responsibility for resolving a particular issue depends on the nature of the problem and the terms of the contract.
Does title insurance fix a title problem?
It depends. Title insurance provides coverage for certain title-related risks under the terms of the policy. It does not automatically correct every defect or guarantee that a closing can proceed with an unresolved issue.
Selling a Home in Massachusetts? Sherman Law Can Help.
A title problem doesn’t always mean your home sale is in jeopardy. Identifying the issue early and understanding the available options can make a difference.
At Sherman Law, our attorneys assist clients with Massachusetts real estate transactions, including title matters and residential closings every day.
With offices in Hingham, Boston, Plymouth, and Dartmouth, Sherman Law serves clients throughout Massachusetts.
Contact Sherman Law to discuss your real estate transaction.
About the Author
Attorney Timothy A. Sherman is a Massachusetts real estate attorney with more than 20 years of experience helping buyers, sellers, and lenders navigate real estate transactions. As the founder of Sherman Law, Tim and his team assist clients throughout Massachusetts, with offices in Hingham, Boston, Plymouth, and Dartmouth.
Contact Attorney Sherman:
Phone: 781-664-4936
Email: [email protected]
