Title describes the rightful ownership of property. When you purchase a home you are purchasing title to that real estate. Other individuals or entities could have claims on the property you’re trying to buy. There could be unpaid mortgages or liens for unpaid taxes filed against the property, for example, that “cloud” the title, and prevent you from receiving “clear” title to theproperty.

One of the costs of financing your home purchase is likely to be a title search initiated by the lender. The lender will arrange for an attorney or an abstract or title company to search all the public records for any documents or instruments that relate to the property. Generally the seller is responsible for correcting any defects - removing any “clouds” - in the title so that he or she can convey good title to you.

Your lender may require you to purchase title insurance in order to insure against loss should the title prove defective in some way.