First of all, are you wondering what the title is?
The term ‘term’ referred to legal ownership rights to a home.
A title search ensures that the property you want to buy has clear and unblemished titles by contacting a licensed title company.
As part of the investigation, public records, deeds, court records, and names associated with the property are examined in detail.
The process is typically completed by a real estate agent, lender, or builder and is an important part of the home-buying process.
It also serves as a stepping stone to obtaining a title insurance policy.
A title insurance policy protects you, the buyer, and your lender from most problems that could arise regarding the title of a property.
These include liens, encumbrances, easements, mis-indexed documents, and missing heirs that may arise after you purchase the home or that were missed by your title examiner.
This blog will discuss the difference between a title search and title insurance.
A title search is a process of examining public records to verify property ownership and reveal any claims or liens that might prevent a buyer from legally purchasing a home.
Information like this facilitates a smooth sale by assisting buyers in making informed decisions.
A search may be required by a mortgage lender in order to qualify for financing, or by the owner of a real estate property before a sale takes place.
It is a necessary step in the real estate transaction process that allows you to make an educated decision and protects your investment.
The current owner, as well as other parties on the title, is identified after a comprehensive search that looks back decades of ownership history.
These issues can delay or even prevent a sale and can be costly.
When you buy a home, your mortgage lender may require you to purchase a title insurance policy. This policy protects the lender against any losses resulting from third-party claims that arise after the sale of your home.
A title insurance policy also protects you against a loss that may occur due to a defect in your property’s title. It provides legal fees and reimbursement of any lost property value when a claim is made against your title.
In some states, the premiums for a title insurance policy are regulated by the state.
However, in other states, title insurers are not regulated and may set rates independently of the state.
The title search is important to know about issues related to property ownership: Ranging from filling errors to continued border wars, title search helps you to overcome such issues leading to ownership problems in the future.
The title search will give you an exact record of the list of owners.
It gives relevant information on any outstanding liens on the person you buy the property from. It includes hospital liens, IRS liens, child support liens, mechanic’s liens, state tax liens, or abstract of judgment.
It detects any flaws related to the title search that has to be sorted.
The primary benefit of a title insurance policy is that it protects the homebuyer and mortgage lender against losses caused by defects in the deed to the property.
These defects are not immediately apparent, but they can have devastating consequences for the new owner of a home.
For example, if a prior owner failed to pay property taxes or hires a contractor to do work on the house, the city or county might place a lien against the home that cannot be removed until those expenses are paid.
Owner’s title insurance can help protect you from these issues, by providing a cash settlement if a person sues you for ownership of the home after you have purchased it.
It also helps make it less likely that a previously undisclosed heir will claim ownership of the property after you die.
Title search is a process whereas Title Insurance is a product that is produced by the title professionals.
It is a legal requirement for the seller to have a title search done on the property to ensure their legal rights. On the other hand, Title insurance offers you coverage from situations that could arise after you purchase a property or remain undiscovered during the title search. It includes liens, easements, mis-indexed documents, encumbrances, and missing heirs.
Both title search and title insurance are important for you in case you need to buy a home.
Title search safeguards your home buying process from any prevailing issues as discussed in the blog while Title insurance saves you from any sort of hidden issues and possible claims on your property title.