What is the significance of a title search during a real estate transaction?

A title search plays a crucial role in real estate transactions as it serves to verify legal ownership and identify any claims or encumbrances on a property. This process involves examining public records to confirm that the seller has the right to sell the property and that there are no outstanding debts, liens, or other issues that could affect ownership or use of the property.

When a title search is performed, it reveals the history of the property, including past ownership and any claims that might exist, such as mortgages, easements, or restrictive covenants. This is essential because such claims can significantly impact both the buyer’s future use of the property and the ability to obtain financing.

In contrast, assessing property value, determining selling strategies, and calculating property taxes are not primary functions of a title search. While these aspects are important in real estate transactions, they are addressed through different means, such as appraisals for value assessment or discussions with tax authorities for tax calculations. Therefore, verifying ownership and uncovering claims is the fundamental significance of conducting a title search.