An abstract of title, or title abstract, briefly summarizes the various activities affecting ownership of a parcel of land. When a person or business agrees to purchase real estate, that person or business arranges for an examination of the history of the property’s title. This examination is known as a title search. A title search is conducted to determine that the seller of the property in fact owns the property and has a free-and-clear title. A free-and-clear title has no clouds on it, which means that no person or business other than the seller has an interest in, or claim to, the property. Title searches are primarily performed to answer three questions regarding a property on the market, these questions go as follows:
- Does the Seller have a sealable interest in the property?
- Are there restrictions or allowances that pertain to the use of the land?
- Do any Tax liens exist on the property which needs to be paid off at closing such as mortgages, back taxes, mechanic’s liens, and other assessments?