The most concise description of a “title” is a bundle of rights in real property. A “title search” is the process of determining from public records what the rights are and who rightfully owns them. It determines if the person selling a property truly has the right to do so, and that the potential buyer is receiving all of the rights to the property (title) that they are paying for. The title abstractor will determine the “chain of title”, which is simply a history of ownership of a particular property which is determined through public records.
The reason a title company conducts this search is to ensure the property is conveyed with free and clear title (ie: no liens, outstanding mortgages, etc)
Municipality search
It is essential to determine the current status of real estate taxes for the property. This search reveals if taxes are currently paid up or in arrears. This includes any outstanding water or sewer bills as well. This information is provided by the municipality directly, based on information available at the time.
Commitment
When the title search is complete, the title company will then issue a “commitment to insure”, which states the conditions under which it will insure the title.
