How Does a Title Company Figure Out That a Title is Valid?

Dated: September 15 2019

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When you’re buying a home for sale in Vero Beach, you’ll hire a title company to determine whether the title on the house you want is clear.

But what does a title company look at, and how do they figure out whether a title is clear?

Here’s what you need to know.

How Does a Title Company Figure Out That a Title is Valid?

A title company’s job is to make sure that a property title is legitimate. That gives you the ability to buy the property knowing that you’ll really be the owner.

The title company you hire will examine property records very carefully. They’re looking for other people or companies that claim ownership in the property – and if they find them, the title is “clouded.”

If someone else can claim ownership in the property – other than the person who’s trying to sell it to you – you cannot buy the property. That person or company owns it.

The title company will look for things like:

  • Outstanding mortgages
  • Liens
  • Judgments
  • Unpaid taxes
  • Restrictions
  • Easements
  • Leases
  • Other issues that might impact your ownership of the property

What is an Abstract of Title?

A title company won’t issue title insurance until it prepares an abstract of title. An abstract of title is a document that summarizes what the company found during the title search. It’s really a history of the property’s ownership.

With the abstract of title, the title agency will issue a title opinion letter. That’s a legal document that says whether the title is valid. 

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Chip Boyer

Chip is the IT Manager for Alex MacWilliam Real Estate. He handles the technology needs of the company as well as helping agents in their day to day problem solving.....

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