Perfect Title

What Is Perfect Title?

Perfect title refers to ownership of a property through a deed free of any liens or defects. This is sometimes referred to as a good, clean, or free and clear title.

Understanding Perfect Title

Perfect title refers to a state of ownership resulting from a deed unblemished by liens or other defects. Such a deed provides the holder with clear ownership that cannot be challenged by a creditor or other claimant. The deed is in optimal condition for a smooth sale or transfer of property.

It is important to understand the difference between title and deed. Title refers to the rights of ownership of a specific asset, often a unit of real estate. Deed refers to the physical document prepared for a sale or transfer. The deed lists legal details of the property such as exact location and any easements or liens on the property. When preparing to issue a mortgage for the purchase of a property, a title company will thoroughly research the title history of that property. The goal of this research is to uncover any hidden defects that would have to appear on the deed being prepared.

Common Obstacles to Perfect Title

The title search may seem archaic in the age of electronic record keeping, but it safeguards the lender and purchaser against legal problems that could arise and dramatically threaten the value of a property. Below are some defects that a thorough search can uncover.

Once the title has cleared the title search, ideally in perfect form, the title company will produce an opinion letter summarizing its findings. It will also issue an insurance policy protecting the lender and purchaser against any further unforeseen defects in title.