What Is A Title In Real Estate?
The world of real estate is tricky and filled with terms that the average person wouldn't know about. It can be tough to navigate buying and selling without studying up on the legal ins and outs of the process. If you're planning on buying or selling a property anytime soon, the word "title" is one of the most important terms to understand.
To have the title to something means to have legal ownership over something valuable. In real estate, "title" is a term that means you have ownership and control over a property. It also implies that you have the right to sell a property for financial gain. A title can be held by individuals, couples, organizations, trusts, or other groups, according to Atlantic Bay. The term can also refer to the physical document, or deed, that proves ownership, according to the NYC Bar. This document ties you to the legal right to ownership of the property.
What you need to know
The title comes in handy for identifying who is responsible for a property and what can and can't be on the property. The first step to receiving a title is having a title company, picked by the seller or buyer, complete a report. These mandatory reports document the history of all previous title owners. They also indicate liens, title defects, the names of any mortgage lenders, and the principal loan amount, according to Inman.
When receiving a title, you can invest in title insurance. Although it's not mandatory unless you're buying from a lender, it's highly recommended to protect yourself and your house. Quicken Loans notes that title insurance is used to help homeowners deal with home issues that were unfound during initial reports and can also protect you from any unrecorded claims to the property. For example, if there is a dispute over ownership for any reason, title insurance will protect you from potentially losing your property.