How Title Companies Determine if a Title is Valid

When you hire a title company during a real estate transaction, you’re hiring a company that specializes in confirming the legitimacy of a piece of real estate. Once the legitimacy is confirmed, that company will then issue title insurance for that property.

The goal of the title company is to provide a buyer with peace of mind that once he or she buys a piece of property, they are the rightful owner of that property. With hundreds of thousands of dollars at stake, you can see why title companies play such a pivotal role in every real estate transaction in Louisiana.

But not everyone is clear on how title companies determine a title is, indeed, valid.

Here at Clean Title of Greater New Orleans, we conduct a title search. During this search, we look for outstanding mortgages, liens, judgments, or unpaid taxes tied to the property.

We also research any existing restrictions, easements, leases, or other issues that could impact sole ownership.

There are times when we’ll require a property survey as well. This survey determines the boundaries of a plot of land that the home sits on. The survey helps us confirm whether the home does, in fact, sit within those boundaries as well as if there are any encroachments on the property by neighbors.

Before we issue title insurance, we prepare an abstract of title. This abstract of title is a summary outlining what we found during our search. In other words, it’ll go into detail about all past owners of the property.

We’ll then issue a title opinion letter, which speaks to the validity of the title.

Title insurance – what is it?

Once we confirm that the title is valid, we have the green light to issue a title insurance policy. This policy protects the lenders, or owners, against claims or legal fees that may arise from disputes over ownership of the property.

How do you choose the right title company for your real estate transaction?

Word of mouth is one of the most effective ways to start your search. Ask your real estate agent and friends who just bought a home. See if they have any recommendations.

Once you come up with a short list, whittle that list down by looking for a title company that has a solid reputation and proven track record. This company is your last line of defense as you look to buy (and own) a home.

You want only the best.

We here at Clean Title, LLC are proud of the reviews and recommendations our clients have offered. You can see many of these reviews on our Facebook page.

With a blend of personal flavor and professionalism, we ensure our clients know exactly what’s happening every step of the way, so that they can feel confident that when they sign on the dotted line, they’re signing to turn a house into a home.

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