When buying a house, you will have to go through the step of getting a title search completed on the house, and this is a step that many people do not really understand. Even those who have gone through it before may not understand what it even is, yet it is a step that is vital when buying a house. Here are several things you should know about a title search when you are in the process of trying to close on a house.
A title search is a background check on a house
The easiest way to understand what a title search is can be comparing it to a background check. A background check on a house will help you learn more about this house, and it will tell you things that you need to know before you take possession of it. One thing a title search will reveal is who the owner of the house really is. While this may seem silly, it really is not, because there have been people who have tried to sell a house they did not even really own. A title search will prevent this from happening.
Secondly, a title search will tell you what liens are on the house. A lien is a loan or claim to the house, and there are times when people do not even realize that their homes have liens on them. If you buy a house and later discover there is a lien, you would have to pay the lien yourself, unless you had purchased a title insurance policy.
A title search is necessary for title insurance
Title insurance is something that you will have to purchase when buying a house, as your lender will require it. The purpose of it is to protect yourself, as this is the key purpose for all types of insurance products. When you have title insurance, you will not have to worry about problems found on the title of the house at a later point in time, as you have paid for coverage. If a problem is found later on, the title insurance company would be responsible to pay to fix the problem. While it is rare that this happens, there are still occasions when it does, and you will be glad you were protected if this ever happens to you.
You can learn more about title searches and other steps required in the closing process by talking to a residential real estate agent.