“Title” is your right of ownership in real estate, protected by the law. It is evidence that you are in lawful possession of the property. It is a collection of all the elements that constitute your legal right to own, possess, use, control, enjoy and dispose of your property. You may take title in a number of ways and it is advisable to speak with a qualified real estate attorney if you have any questions. For example:
In California, we use a Grant Deed for the seller of a property to guarantee two things:
In order to make such a guarantee, the seller’s agent or assigned escrow officer must open a title order with a title company to perform a title search. The title search looks for encumbrances or “liens” against the property that may cloud the title. A lien is a claim against the property made by someone in order to secure payment of a debt. There are two primary types of liens:
Once the title company successfully completes the title search, they issue a Preliminary Report for the buyer’s review and approval. The title company can then underwrite a title insurance policy to the buyer (Owner’s Policy, based on the full purchase price of home) and the lender (Lender’s Policy based on the value of loan) to protect against claims from defects in title, such as:
As part of the escrow closing process, the Grant Deed is signed by the seller and notarized by a notary public, as evidence that the signature is authentic. When California was admitted to the union in 1850, one of the very first acts of the Legislature was to adopt a recording system by which evidence of title could be collected and maintained in a convenient and safe public place – this is our County Recorder’s Office.
In summary, when you purchase real estate, you and your lender must be assured there is clear title to the property and insure against any loss that could result from defects in the title.