When purchasing a property in Colma, California, it is crucial for buyers to understand the difference between title insurance and a title search. Both are essential components of the real estate transaction process, but they serve distinct purposes to protect the buyer’s interests.
A title search is conducted by a professional title company or an attorney to examine the history of the property’s ownership and determine if there are any existing liens, encumbrances, or disputes associated with the title. This thorough investigation involves reviewing public records, deeds, mortgages, and other legal documents. The goal of a title search is to ensure that the seller has the legal right to transfer ownership of the property and that there are no unforeseen issues that may affect the buyer’s ownership rights.
On the other hand, title insurance is a form of protection for the buyer against any potential defects or issues with the title that may have been missed during the title search. It is an insurance policy that safeguards the buyer’s investment in the property by providing financial coverage for any future claims or legal disputes related to the title. Title insurance offers peace of mind to buyers, assuring them that they won’t be held responsible for any unforeseen defects in the title that could threaten their ownership rights.
While a title search is a one-time examination of the property’s history, title insurance provides ongoing protection for as long as the buyer or their heirs own the property. It covers various risks, including undiscovered liens, forged documents, undisclosed heirs, and errors in public records. In the event of a claim, the title insurance company will handle the legal defense and, if necessary, compensate the buyer for any financial losses incurred.
It’s important to note that title insurance is typically a requirement from most lenders when obtaining a mortgage. Lenders want assurance that their investment is protected in case any title issues arise in the future. However, buyers also have the option to purchase additional owner’s title insurance to protect their own interests.
In summary, a title search is a thorough investigation into the property’s ownership history to identify any existing issues, while title insurance provides ongoing protection against unforeseen defects in the title. Both are crucial steps in the real estate transaction process, providing buyers in Colma with the necessary peace of mind and financial security when purchasing their dream home.
