The term title search is used to describe the examination of public records involving a specific real estate property, verifying that no other claims against the property exist. Typically, a title search is conducted to ensure the certificate of title can legally pass from a seller of a home or a parcel of land to a buyer.
When buying real estate, the new homeowner is legally purchasing the certificate of title to the home. Through this exchange, the owner of the title to the home has the legal right to possess the dwelling.
Prior to Closing, a title search is conducted to identify public records that may affect the transfer of title to the purchaser of the home. The company providing the title search service will look for items such as liens, mortgages, and judgments that might prevent transfer of ownership. This search will also provide for corrections in the event that information is missing on a document such as a deed.
Even if a title search is thorough, there are situations that can later bring into question the ownership of the property. For example, the sudden appearance of an heir identified in a Will, or discovery of a forged signature on a document, could start a legal dispute over ownership. Title insurance protects the buyer against errors and unforeseen disputes that arise after a title search is complete. This is why mortgage lenders require future homeowners to purchase insurance; to protect their investment in the home or property too.