Title Search: What It Is, How It’s Done, and the Role of Title Insurance

Title search is one of the most significant aspects of real estate transactions. It ensures that the property you are trying to buy or sell is free from any legal issues. Legal issues such as deeds, mortgages, tax requirements, court judgments, lineage problems, encroachments, or disputes over the property are thoroughly searched and examined.

This process ensures that the property ownership history is clear and eliminates any legal complications that could arise from the sale of the property.

For example, if Luna decides to purchase a property from Sarah, her real estate agent will recommend conducting a title search before finalizing the deal. To perform this, a title company will search public records at the recorder's office to verify that the property legally belongs to Sarah, and she has the legal right to sell it.

How Is the Title Search Done?

There are multiple steps that attorneys or title companies follow to ensure a thorough and accurate title search:

1. Search Public Records

Attorneys or title professionals search through public records, including deeds, mortgages, tax filings, court judgments, and other legal documents held at county or municipal offices. These records help identify the legal history of the property.

2. Reviewing the Chain of Title

Once the property records are located, title professionals review the chain of title, which refers to the historical transfer of ownership of the property. This process ensures that ownership has been legally transferred without any disputes. A clear chain of title is essential for a legally sound transaction.

3. Check for Liens and Encumbrances

Title experts examine whether there are any liens or encumbrances on the property. Liens can include outstanding debts, unpaid taxes, or other legal claims that could affect the property's value or delay the sale process.

4. Identifying Restrictions and Easements

Professionals also search for any restrictions or easements attached to the property. Restrictions may include zoning rules, while easements could limit how the property can be used or accessed.

5. Compiling the Title Report

After thoroughly reviewing all relevant documents, title professionals compile a comprehensive title report. This report outlines the findings of the title search and highlights any issues that need resolution before finalizing the sale.

Title Insurance

Title insurance is a unique type of coverage designed to safeguard both property buyers and lenders against potential financial losses arising from problems with the property's title.

It offers protection against ownership disputes, errors in public records, or undiscovered legal claims that may arise during or after the title search.

How Does Title Insurance Work?

Title insurance works in two primary ways:

1. One-Time Premium: Title insurance typically requires a one-time premium payment, unlike other types of insurance that require ongoing payments.

2. Coverage Period: Title insurance covers issues that existed before the policy purchase and may also provide protection against future title-related problems.

   
   

Types of Title Insurance

There are two main types of title insurance:

• Owner’s Policy: Protects the buyer’s ownership rights.

• Lender's Policy: Provides protection for the lender's financial stake in the property.

Each type of policy has its own benefits, providing financial security and peace of mind during the property transaction process.

Why Is Title Insurance Important?

No matter which type of title insurance you choose, it is essential to protect yourself from unexpected claims, ownership disputes, or financial losses. Title insurance ensures that your property transaction is secure and legally sound, giving you confidence and peace of mind.