What is the importance of conducting a title search?

Conducting a title search is primarily important because it verifies ownership and ensures that the title to the property is clear before a transaction takes place. This process involves examining public records to confirm that the seller has the legal right to sell the property and that there are no outstanding claims, liens, or encumbrances that could affect the new owner's rights.

A clear title is essential for both the buyer and lender: the buyer wants assurance that they will not face legal challenges over ownership after the purchase, and the lender wants to protect its investment by ensuring that the property can serve as collateral without complications. Without a thorough title search, buyers risk encountering unforeseen issues that could lead to disputes, financial loss, or even the loss of the property itself after a purchase is made. Thus, this step is crucial in the real estate transaction process for ensuring a smooth transfer of ownership.