In effect, she was still in title as an owner because she hadn't transferred her interest in the property. A good title Your real estate purchase contract should include a clause that requires the sellers to provide you with good title to the property at closing. If the sellers are unable to do this, you should be able to withdraw from the contract without penalty. In the example above, the buyer's title insurance company was able to track down the wife's heirs and get the signatures necessary to remove the cloud on the title. The defect in the title report was corrected and the sale went through.
Most buyers take out a mortgage when they purchase a home.
But before a lender will issue a mortgage, there will need to be evidence that the buyers will receive good title to the property. Also, the lender will require that a title insurance policy be purchased, usually at the buyer's expense, guaranteeing the lender's interest in the property. It is not transferable from one party to another. A lender's policy of title insurance won't protect the buyers' interest, but buyers can get title insurance for their own protection. Even if you're paying all cash for a property, and won't need a mortgage, it's wise to obtain a title insurance policy to protect yourself.