The Complete Guide to Real Estate Title: Searches, Insurance, Liens & FSBO

📘 Quick Summary: What Is “Title” in Real Estate?

Title is the legal ownership of a property. It defines who has the right to use, transfer, sell, and control the home — and whether any claims or liens exist that could prevent closing.

• ✔ Title shows legal ownership
• ✔ A title search uncovers liens, claims, heirs, or errors
• ✔ A clear title is required to close
• ✔ Title insurance protects buyers and lenders
• ✔ Title companies manage escrow, closing, and legal documents

New to title concepts? Start with: What Is Title in Real Estate?

🔍 How Title Works in a Real Estate Transaction

Every home sale requires the title company (or attorney in some states) to confirm ownership, identify issues, and prepare documents transferring the property to the buyer. Understanding this process helps FSBO sellers avoid delays.

📌 1. Title Search

The title company investigates public records, liens, taxes, ownership history, and legal restrictions.

Guide: What Is a Title Search?

📌 2. Title Report / Preliminary Title Report

The results of the search are summarized in a report that lists any issues, liens, restrictions, or ownership questions.

Guides: Title Report • Preliminary Title Report (Prelim)

📌 3. Title Commitment

Before issuing insurance, the title company lists conditions that must be satisfied.

Guide: What Is a Title Commitment?

📌 4. Clearing Title Issues

Any discovered problems — liens, unreleased mortgages, missing signatures, probate issues, or legal disputes — must be resolved before closing.

📌 5. Closing & Title Insurance

Once cleared, the seller transfers ownership via the deed and the buyer receives title insurance coverage protecting them from future claims.

📋 Core Title Concepts (Explained)

These definitions form the foundation of real estate title. Each links to a full “What Is” explainer for buyers and sellers.

✔ Clear Title

No liens, claims, or restrictions blocking transfer.

✔ Marketable Title

A title acceptable to a reasonable buyer and lender.

✔ Cloud on Title

A claim or issue that causes uncertainty about ownership.

✔ Title Defect

A legal issue that must be resolved before transfer.

✔ Chain of Title

The historical sequence of ownership transfers.

✔ Abstract of Title

A condensed record of all documents affecting the property.

✔ Conveyance of Title

The legal transfer of ownership from seller to buyer.

✔ Vesting

How ownership is legally held and recorded on the deed.

✔ Grantor & Grantee

The grantor transfers ownership; the grantee receives it.

✔ Lis Pendens

A public notice that the property is involved in a lawsuit.

✔ Quiet Title Action

A lawsuit used to remove title defects or resolve ownership disputes.

🛡 Title Insurance: What It Covers & Why It Matters

Even after a title search, hidden risks can surface years later — missing heirs, forged deeds, clerical errors, or unknown liens. Title insurance protects buyers and lenders from financial loss caused by these issues.

Full explainer: What Is Title Insurance?

✔ Owner’s Policy

Protects the buyer for as long as they own the home. Covers:
Learn more about the Owner’s Policy →

• Unknown liens
• Ownership claims or missing heirs
• Forgery, fraud, or document errors
• Survey or boundary conflicts (with endorsements)

✔ Lender’s Policy

Required for financed transactions. Protects the lender’s interest until the loan is paid off.
Learn more about the Lender’s Policy →

Learn more: Who Pays for Title Insurance?

📑 Title Endorsements

Endorsements expand coverage beyond standard policies. Common examples include:

• Survey Coverage: Boundary and encroachment issues
• HOA Endorsement: Condo / HOA violations or assessment issues
• Restrictions Endorsement: Violations of recorded covenants
• Gap Coverage: Protects during the gap between search and recording

Full explainer: What Is a Title Endorsement?

💰 Who Pays for Title Insurance & Closing Costs?

Responsibility varies by state — but generally:

• Seller often pays for the owner’s policy
• Buyer typically pays for the lender’s policy
• Costs may be split or negotiated depending on the market

State-by-state breakdown: Who Pays for Title Insurance?

General closing costs breakdown: Who Pays Closing Costs?

Deep FSBO analysis: Seller Closing Costs (Full Guide)

📄 Key Title & Closing Documents Explained

These documents appear in nearly every real estate transaction. Understanding them prevents surprises during escrow.

✔ Closing Disclosure (CD)

Used in financed residential sales. Lists loan terms, closing costs, prepaid items, and final cash-to-close.

✔ HUD-1 Settlement Statement

Used for cash deals, reverse mortgages, and non-TRID transactions.

✔ Closing Costs (Itemized)

Covers lender fees, title fees, escrow, taxes, insurance, and prorations.

📅 Title, Escrow & Closing Timeline

• Day 1: Offer accepted → Earnest money deposited
• Day 1–3: Title search begins
• Day 4–10: Prelim / title report delivered
• Day 10–25: Liens & issues cleared
• Day 20–35: Title commitment updated
• Day 30–45: Closing scheduled
• Closing Day: Buyer & seller sign → Ownership transfers → Title insurance issued

Related guides:
HUD-1 Settlement Statement
Closing Costs Explained
Closing Disclosure
Who Pays Closing Costs?

🏡 FSBO vs Realtor: How the Title Process Differs

The title process itself is identical whether you sell FSBO or through a Realtor — the title company performs the same search, prepares the same documents, clears the same liens, and issues the same policies.

Where FSBO sellers benefit is in cost savings and direct communication.

✔ What Stays the Same

• Title search
• Title report / prelim
• Title commitment
• Clearing liens & defects
• Escrow funds & disbursements
• Closing coordination
• Title insurance

✔ What’s Better for FSBO Sellers

• No 6% listing agent fee
• Direct communication with title & escrow
• Full visibility into requirements & documents
• Ability to negotiate fees directly
• Fewer communication bottlenecks

Learn more: Seller Closing Costs (Full Guide)

❓ Title FAQs

✔ What is the biggest title problem sellers face?

Unknown liens, unpaid taxes, judgments, or clerical errors that appear during the title search.

✔ Can buyers cancel because of title issues?

Yes — under the title contingency buyers may cancel and receive earnest money back.

See Title Contingency →

✔ What if title issues can't be cleared?

The contract may be terminated and earnest money refunded unless both parties negotiate a resolution.

✔ Does FSBO affect the title or escrow process?

No — the title company handles the same legal and closing procedures regardless of how the property is listed.

✔ Can title companies fix title issues?

They cannot change ownership or override liens, but they coordinate the payoff, correction, or legal documentation needed to clear them.

✔ What documents do I need to sell FSBO?

You will need your ID, deed, disclosures, payoff information, HOA documents (if applicable), and settlement paperwork prepared by the title company.

📚 Explore All Title Guides

• Title (Definition)
• Title Search
• Title Report
• Preliminary Title Report
• Abstract of Title
• Chain of Title
• Clear Title
• Marketable Title
• Cloud on Title
• Title Defect
• Title Commitment
• Title Insurance
• Title Endorsement
• Lis Pendens
• Quiet Title Action
• Vesting
• Grantor
• Grantee
• Conveyance of Title
• Who Pays for Title Insurance?
• Who Pays Closing Costs?
• Seller Closing Costs
• Closing Disclosure
• HUD-1 Settlement Statement
• Closing Costs Explained
• What Is Closing?

🚀 Ready to List Your Home FSBO?

Brokerless gives you MLS access, full transparency, and support — all without paying a 6% commission.

View Flat Fee MLS Plans →