Title & Insurance
A title is the legal documentation that includes the specifics about the home you are purchasing and who currently owns it, often in the form of a deed. One of the steps in buying a home is to have a title search completed prior to closing. A title search is performed to ensure that the title is clear and that there are no unexpected surprises. While most home purchases are completed with very little hassle, some do involve issues with the title. Although most are minor problems and easily resolved, it is important to understand what to expect.
Once you are under contract on a home, one of the first things you will do is buy title insurance. An owner’s policy provides coverage equal to the amount you are paying for the property. It protects the owner if a problem is discovered after the search is completed.
A title investigator looks for any claims to the title that may affect your purchase. The search will include public records and other land records spanning many years. If it is discovered that the seller of the home you wish to purchase has ownership with another party, then any and all owners must sign the closing documents before the sale can be completed. Outstanding judgments or delinquent taxes must be paid at closing before a clear title is received. The seller has the responsibility for resolving any issues with the title.
A title search also provides information about easements, restrictions and rights-of-way that could limit your use of the property. Review these documents prior to closing to ensure that you understand any potential impact.