Why is a title search conducted in real estate transactions?

A title search is a fundamental step in real estate transactions primarily aimed at verifying legal ownership and uncovering any liens or encumbrances that may affect the property. By conducting a title search, parties involved can confirm that the seller has the rightful ability to sell the property and that the title is free from defects. This involves reviewing public records to ensure there are no disputes over ownership and that any claims against the property, such as mortgages or unpaid taxes, are identified and can be addressed before the transaction is completed.

Having a clear title is crucial to avoid future legal issues, ensuring that the buyer receives a property that is unencumbered and that their investment is secure. This thorough examination protects both the buyer and the lender and helps in facilitating a smooth transfer of ownership. Other options such as estimating property taxes, assessing the condition of the property, or evaluating the market rate primarily address different aspects of property transactions that do not directly relate to confirming legal ownership and the state of the title.