What does "title opinion" signify in real estate?

A "title opinion" refers to a professional assessment of the title based on the findings from a title search and investigation of public records. This document is typically prepared by an attorney and provides an analysis of the legal ownership of the property, any encumbrances, such as mortgages and liens, and any potential issues that could affect the ownership rights.

The title opinion is crucial because it informs the buyer or lender about the status of the property’s title before a real estate transaction is finalized. It addresses any concerns and helps ensure that the title is free and clear of defects, which is essential to legitimizing the transfer of ownership. Understanding the title opinion helps stakeholders mitigate risks related to ownership disputes or unexpected claims against the property.

In contrast to the other options, a legal document transferring ownership describes a deed, a summary of liens pertains to a different type of report that might not encompass the broader legal analysis provided in a title opinion, and a report detailing property tax obligations is distinctly separate from title assessments, focusing instead on financial responsibilities associated with the property.