How does a title insurance company verify ownership of property?

A title insurance company verifies ownership of property primarily through an investigation of public records and related documents. This process involves examining various legal documents such as deeds, mortgages, liens, and tax records to establish a clear chain of title, which outlines the history of ownership. By reviewing these records, the title company can determine if the seller has a legal right to sell the property and whether there are any encumbrances or claims against it.

This thorough investigation helps ensure that the title is free from defects and that the buyer will have a legally enforceable interest in the property. Public records provide critical information regarding prior ownership, any existing liens or claims, and any potential issues that may affect the buyer's interest in the property. Therefore, this method is the cornerstone of the title insurance process, assuring buyers and lenders that their property rights are protected.

In contrast, conducting a property appraisal focuses more on determining the property’s value rather than verifying ownership. Interviewing previous owners may provide anecdotal information but does not replace the legal examination of recorded documents. Automated processes can aid in the title search but cannot fully replace the necessity for human oversight and interpretation of complex legal issues surrounding property ownership.