Generally speaking, an affidavit is a written statement or declaration, made under oath before a licensed individual, such as a notary public or even a Judge. You’ve probably heard the term on police and legal courtroom TV shows. In other terms, it’s a legal testimony the person swears by as the truth.
In real estate, affidavit of title refers to a written statement made by the home sellers, testifying the “health” status of the property title. It is usually a request made by title companies in order to issue title insurance. In the affidavit of title, the home seller states the property is theirs to sell and he’s not selling to anyone else, plus discloses any potential legal issues (like a lien) the property might be going through. The affidavit of title should also address any bankrupt proceedings the home seller might be going through which could hold the house as a collateral asset.
The idea behind the affidavit of title is providing a safety net for the home buyer in the case of any legal issues facing the seller and/or the house later on. The affidavit of title is produced during closing, and can have from 1 to 5 pages, depending on the number of encumbrances the property has.
Exclusions are sometimes given in an affidavit of title. For instance: a home seller can state that there is attached to the title still some owed mortgage, and he or she will pay it after closing. With this information, the home buyer can elect to pay no mind to it or tell the home seller he or she will only go through with the sale if the issue is fully resolved beforehand.
In some jurisdictions, an Affidavit of title is mandatory in order for the transfer of title to happen.
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