What Happens in a Title Search
A title insurance policy is issued to protect the buyer’s interests and, if applicable, the lender. When you order title insurance, a series of steps are taken to examine the property’s title for potential issues.
Title Search and Examination: The title company conducts a comprehensive title search on the property. The search involves examining public records, deeds, mortgages, wills, court records, and other documents to establish a clear ownership chain and identify potential issues in the title.
Identifying and Resolving Title Issues: If any title issues, such as unpaid liens, undisclosed easements, or unresolved judgments are discovered during the title search, the title company will assist to resolve them. This may involve contacting creditors or obtaining necessary releases or documentation.
Title Commitment: When the title search and examination is completed, the title company provides a title commitment, which will disclose any issues to be addressed. This document outlines any requirements needed to clear the title, as well as the terms and conditions of the title insurance policy.
Title Insurance Policy: The title insurance policy is issued once the real estate transaction has been closed and the required documents have been recorded. There are typically two types of policies: an owner’s policy (protecting the buyer) and a lender’s policy (protecting the lender.) These policies cover potential title defects and issues that may arise.
Escrow Services: In many cases, the title company also acts as the escrow agent for the transaction. They hold documents, funds, and instructions securely and impartially until all transaction conditions are met.
Closing: At the closing, all parties involved in the transaction (buyer, seller, lender) sign the necessary documents to transfer ownership of the property. The title company oversees the signing process, ensures all funds are disbursed securely, and records the deed with the appropriate government office.
Protection: The title insurance policy remains in effect for as long as you or your heirs have an interest in the property. If a title issue arises in the future, the policy provides financial protection and covers legal expenses associated with resolving the issue.