A title search is performed by a title company to verify that the seller has the legal right to sell the property and that there are no liens, judgments, or ownership disputes. It protects you from buying a property with hidden legal issues.
What a Title Search Finds
The title search checks for: outstanding mortgages or liens on the property, unpaid property taxes, HOA liens, mechanic's liens from contractors, judgments against the seller, easements that affect the property, and boundary disputes. If any issues are found, they must be resolved before closing. The title company handles the resolution process.
How the Title Process Works
The title company researches public records, issues a title commitment showing what must be cleared, clears any issues, and issues a title insurance policy. There are two policies: the lender's policy (required by your lender, protects the bank) and the owner's policy (optional but recommended, protects you). The owner's policy is a one-time cost at closing and covers you for as long as you own the property.