Why is it important to search for judgments and liens in real estate transactions?

Searching for judgments and liens in real estate transactions is crucial because it allows potential buyers or interested parties to identify any claims on the property. Judgments and liens can arise from various financial obligations, such as unpaid debts, which could affect the ownership rights associated with the property. If a lien exists, it may need to be satisfied before the property can be sold or mortgaged, meaning the buyer takes on a risk if unaware of these claims.

Knowing the status of any judgments and liens helps in making informed decisions regarding the property's viability as an investment or purchase. This information is essential for ensuring clean title to the property, protecting buyers from unexpected financial burdens, and facilitating smoother real estate transactions. Understanding this component of due diligence ensures that all potential legal risks are accounted for ahead of time.