What must a title company do before issuing title insurance?

Before issuing title insurance, a title company must conduct a thorough title search and examination. This process is critical because it helps ensure that the title to the property is clear of any encumbrances, claims, or defects that could affect ownership rights. The title search involves reviewing public records related to the property, including previous deeds, mortgages, liens, and any other legal documents that may impact the title.

When a title company performs a title examination, they are confirming the legal ownership of the property, identifying any possible issues that might arise, and ensuring that all parties involved can proceed with the transaction safely. Only after this rigorous assessment can the title company issue a title insurance policy, which protects the owner and the lender from any future claims against the title that were not uncovered during the search.

In contrast, conducting a property appraisal and preparing closing documents, while important aspects of real estate transactions, are not requirements specifically tied to the issuance of title insurance. Getting the buyer's confirmation also does not directly impact the ability to issue a title insurance policy. Thus, the thorough title search and examination is a fundamental step necessary for the secure transfer of property ownership.