What is the purpose of title searches in real estate transactions?

The purpose of title searches in real estate transactions is to verify legal ownership and ensure that there are no liens or encumbrances on the property. A title search involves examining public records to confirm that the person selling the property has the legal right to do so and that the title is free of issues that could affect ownership, such as unpaid taxes, judgments, or mortgages. This process is crucial because it protects the buyer from potential legal problems that could arise after the purchase. By ensuring that the title is clear, the buyer can proceed with the transaction with confidence, knowing that they are acquiring good title to the property without any hidden claims against it.

Other options do not accurately reflect the fundamental purpose of a title search. Determining rental value, assessing market trends, and finding potential buyers relate to different aspects of real estate transactions that do not involve the verification of property ownership or the examination of obligations associated with the title.