Residents in Florida who are interested in buying a new home should understand the various steps involved in the buying process. Some of these steps are designed to protect home buyers and their lenders. Title reports and title insurance policies both fall into this category.
As explained by Zillow, there are two types of title insurance policies. One policy is for the new owner and buyer and the other policy is for the bank that will be issuing the mortgage on the property. The purpose of these policies is to protect buyers and lenders from potential errors on title reports. If an eventual issue arises and it is found that the buyer was not able to legally purchase the property due to a title report mistake, the title insurance company that insured the policy can financially compensate owners and lenders for their loss.
Conducting a thorough title search is important when buying a home. A title report should detail situations that might prevent a legal purchase transaction and should confirm that the seller has the legal authority to sell the home.
First American explains that some problems able to be found via a title report search include heirs to a property that may have not been previously identified or outstanding liens on the property. Property line issues or encumbrances such as easements will also be detailed in a title report. Public records that list judgments or other actions should be reviewed carefully to ensure no errors have been made due to clerical mistakes or other filing problems.