Buying your first house in San Francisco is an achievement. But before you sign the purchase agreement with the seller, you must perform two key steps: title search and title insurance. These might sound redundant, but understanding their purpose is key to protecting your biggest investment.
What the title search uncovers
Title search refers to the process of verifying the property’s legal ownership and history. A title company examines public records and traces the chain of title, ensuring the seller can legally transfer the property to you.
The process also uncovers potential problems with the title, such as unreleased mortgages, liens and recorded easements. This information gives you the chance to demand the seller cure these issues before completing the sale.
How title insurance supports title security
While conducting a title search can detect known issues, hidden problems can arise and put your property in jeopardy. This is where title insurance comes in; it protects you against losses when the title is not fully clear due to defects. Examples include forgery of a previous deed or a missing heir who suddenly surfaces to claim ownership of property.
Your shield against the past
Working with a title company and securing an insurance policy are crucial steps you must not miss. These ensure you are not at risk, protecting your investment from potential property problems.
Title issues can become complex fast. When reviewing your preliminary title report, having someone who understands real estate law can be a huge advantage.