{"id":369066,"date":"2016-04-04T10:47:11","date_gmt":"2016-04-04T15:47:11","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/realestate\/buying-a-home\/do-you-need-title-insurance.html"},"modified":"2023-08-28T11:57:16","modified_gmt":"2023-08-28T16:57:16","slug":"do-you-need-title-insurance","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/realestate\/buying-a-home\/do-you-need-title-insurance.html","title":{"rendered":"Do You Need Title Insurance?"},"content":{"rendered":"\n
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Do You Need Title Insurance?<\/h1>\n
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\n By Melissa McCall, J.D.<\/a> | Legally reviewed by Katrina Wilson, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Yes, you do need title insurance. Title insurance protects a homebuyer and lender against post-sale claims against their title. In any real estate transaction, the buyer gets an owner’s title insurance policy and a lender’s title insurance policy for the lender.<\/p>\r\n

This article explores why title insurance is essential when buying a home.<\/p>\r\n

What Is ‘Title’?<\/h2>\r\n

The word "title," in real estate, refers to ownership of real property. For example, consider automobile purchases. When a person purchases an automobile, the title transfers to them, the buyer. This means they have the title to the car. They own the vehicle. Similarly, in real estate transactions, the title transfers to the new homeowner, denoting legal ownership of the home.<\/p>\r\n

The title to a house is not the same as the deed to a house. While a title confers ownership, a deed denotes a property owner’s right to claim ownership.<\/p>\r\n

Title Searches<\/h2>\r\n

Before purchasing a new home, homebuyers should get a title report on their prospective home. Many mortgage lenders require borrowers to get a title report. If the borrower defaults, the mortgage company can foreclose on the house and sell it to satisfy the loan. A clean title report ensures for the mortgage lender that there are no possible obstacles to a potential future sale.<\/p>\r\n

While anyone can complete a title search independently because it is a public record, using a title company is preferable. Title companies execute title searches by examining public records. A public record search should reveal the history of property ownership. A title agent or real estate attorney will conduct the title search and produce a title report. The title report summarizes the results of a title search and identifies any title issues.<\/p>\r\n

What Is Title Insurance?<\/h2>\r\n

Even if a title search reveals no defects or encumbrances, it may not tell the whole story. Encumbrances include some of the following items:<\/p>\r\n