In real estate transactions, title insurance is an important tool as it protects mortgage lenders and buyers from financial losses. These losses may arise from disputes or defects that may have gone undiscovered before the transfer of property ownership.
When a seller and a buyer enter a contract of sale for a home, they hire a title agent who initiates a search in the local jurisdiction’s land records for any claims, liens, conflicts, or encumbrances that should be settled before the transfer of the property.
Other than that, the buyer needs an additional measure of protection by purchasing title insurance from a reputable insurance company.