Owning a property free and clear is important when purchasing. During the process, you may hear terms like title insurance and title search. Despite the fact that both terms pertain to rights of ownership over a piece of property, they have very different meanings.
When purchasing a property, both a title search and title insurance are essential. Performing a title search involves finding out about the current owners of a piece of property. Title searches consider all owners going back to the original claim. It’s important to know if the property has any encumbrances or ownership problems before you purchase it. You can have clear title to a property by purchasing title insurance.
Process and Product
Essentially, one identifies a process, whereas the other identifies a product. When a title company searches a property for encumbrances, it’s called a title search. An insurance policy can be offered by the title company once the search has been conducted. An insurance policy will help to protect their property rights.
The most important benefit of both is that they protect your rights when you purchase property. Title companies often identify potential problems when they do a search on your property. They can help you avoid financial loss. The advantage of title insurance is that it can make your purchase of real estate more secure. Your property is not subject to previous ownership or any type of lien.
A title insurance policy can cover you in a wide range of situations. Following the purchase of the property, if the previous owner sued you, the title insurance company would help you. Your title company will reimburse you for your policy amount if there is any lien or encumbrance on the title that prevents you from taking ownership of the property.
Although you purchase title insurance, it does not necessarily mean there will be no problems related to ownership of the property. You might lose your ownership rights, for example, if it turns out your property is owned by someone else. This means you wouldn’t be able to continue owning the property. However, you could get reimbursed from the title insurance company.