Seller affidavit of title: What your title company needs

What is an affidavit of title?

An affidavit of title is a legal document signed by the seller at closing, under oath. In it, the seller confirms certain facts about the property and his or her ownership. This protects the buyer and the title insurance company from unforeseen claims.

This document is a declaration that, to the best of the seller's knowledge, there are no undisclosed issues that could cloud the property's title. It's a standard part of the closing process in many states and counties.

Why does the title company need it?

The title company relies on this affidavit to issue a clean title insurance policy to the buyer. It helps bridge the gap between what public records show and any recent, unrecorded activities or claims.

Without it, the title company takes on more risk. The affidavit acts as the seller's personal assurance that he or she has the right to sell and that the property is free from certain hidden defects or encumbrances.

Common items on a seller's affidavit

Expect questions about marital status, as this affects ownership rights, particularly with community property or dower rights states. The seller will confirm he or she is not currently in bankruptcy or involved in any litigation that could affect the property.

It typically asks about any improvements or repairs made recently that might still have outstanding contractor liens. The seller also affirms there are no unrecorded leases, easements, or occupants other than those disclosed.

Finally, the seller will state that he or she has not received any notices of liens, special assessments, or boundary disputes not already on record. This helps catch any last-minute surprises.

What if a seller can't sign an affidavit?

If a seller is unable to sign due to legal incapacity or absence, a legally appointed power of attorney may be able to sign on his or her behalf. This power of attorney document must be properly executed and recorded.

In cases of deceased owners, the executor or administrator of the estate, appointed through probate, would be the signatory. This process ensures the person signing has the legal authority to make such declarations.

If there are significant discrepancies or outright falsehoods, the title company may refuse to issue title insurance. This means the deal will not close until the issues are resolved or sufficient legal waivers are obtained. This is not legal advice; consult a legal professional for guidance.

Preparing your seller for this document

Discuss the affidavit with your seller early in the process. Explain that it's a routine document that ensures a smooth closing. Encourage him or her to think about any recent work on the house, any boundary agreements with neighbors, or past financial issues.

Reassure the seller that this is a standard procedure and not an accusation. Being upfront helps him or her recall any pertinent details and avoids surprises at the closing table, which could delay or kill the deal.