Legal
Title
The legal right to own, use, and transfer a property. Having a clear title means there are no outstanding claims, liens, or disputes about who owns the property. Before closing, a title company or attorney conducts a title search to verify the seller has the legal right to sell and that no unresolved claims exist. Clear title is required before a lender will fund your mortgage.
Why It Matters
Title carries legal significance in real estate transactions. Property law, contract law, and lending regulations all intersect when buying a home, and terms like title have specific legal definitions that affect your rights and obligations as a buyer or homeowner.
While real estate agents and lenders can explain general concepts, for questions about title that could have significant financial or legal consequences, consulting a real estate attorney is worth the $200-$500 cost. In some states, attorney involvement in real estate closings is mandatory.
Real-World Example
Legal issues related to title can surface during title searches, contract negotiations, or closing. Catching problems early is far less expensive than resolving them after you've closed on the property.
Pro Tip
If you're buying in a state that requires attorney closings (CT, DE, GA, MA, NY, SC, WV, and others), your attorney will handle title-related legal matters. In other states, consider hiring one independently for a review of your purchase contract.