Buying a home may be the largest investment you make in your life. So before you sign on the dotted line, you want to be certain that the property's title is free of any other claims.
A title company does all the research to insure that a property has clear title. Making sure that a property is clear of all legal encumbrances is the job of a title insurance company.
You pay the title insurance company a single premium which includes the cost of verifying clear title and covers you in case some fault is later discovered in the title.
The title company searches the title history of the property. The title company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.
Because Real Estate Law is so complicated, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem with the title to your property. Your title insurance owner's policy will describe the property and outline any recorded limitations on your ownership. It will also cover what the title company is responsible for. Typically your title insurance will protect you in the following cases:
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