What happens at the closing and settlement phase concerning title insurance?

During the closing and settlement phase, title insurance policies are indeed created and finalized. This is a critical part of real estate transactions, as title insurance protects the buyer and lender against potential issues related to the property's title that may arise after the sale is completed.

At this phase, the title company conducts a title search to ensure that the title is clear or to identify any existing liens, claims, or other encumbrances on the property. Once the search and examination are complete, the title insurance policy is issued to the buyer and the lender, if applicable. This policy guarantees that the title is free from defects and provides protection against future claims or disputes over ownership.

Understanding this process is crucial because title insurance plays a significant role in maintaining the security of real property investments. It safeguards the interests of both buyers and lenders, assuring them that the title is valid and that they will be compensated for any issues that may arise.