Title, liens, and inspections
Before closing, three separate checks look at a home from different angles. A title search looks for claims against the property. An appraisal estimates its value for the lender. A home inspection, if you arrange one, looks at its condition. Each answers a different question.
This is general education, not legal advice. A title company, closing attorney, or settlement agent handles the title work in your transaction, and your state’s laws govern liens and inspector licensing.
Title search and title insurance
When you buy a home, you receive a document, usually called a deed, showing that the seller transferred legal ownership (“title”) to you. Title insurance can protect against someone later claiming an interest in the home that dates from before the purchase, such as a previous owner’s unpaid taxes or a contractor who says they weren’t paid.Source: CFPB: “What is owner’s title insurance?” (Ask CFPB #164, last reviewed Oct 19, 2023) · checked Nov 10, 2026
Title service fees include the title search fee, the premium for the lender’s title insurance policy, and other costs of issuing title insurance. In most states the fee for conducting the closing is also part of the title fees.Source: CFPB: “What are title service fees?” (Ask CFPB #157) · checked Nov 10, 2026
| Policy | Who it protects | Required? | Where it shows on the Loan Estimate |
|---|---|---|---|
| Lender’s title insurance | The lender. It covers only claims that affect the lender’s loan and doesn’t protect your equity.Source: CFPB: “What is lender’s title insurance?” (Ask CFPB #163) · checked Nov 10, 2026 | Usually required to get a mortgage.Source: CFPB: “What is lender’s title insurance?” (Ask CFPB #163) · checked Nov 10, 2026 | Section B (Services You Cannot Shop For) or Section C (Services You Can Shop For). If it is in Section C, you can shop for it.Source: CFPB: “What are title service fees?” (Ask CFPB #157) · checked Nov 10, 2026 Each title item’s label begins with “Title —”.Source: 12 CFR 1026.37(f)(2)–(3) and (g)(4) (Regulation Z: Loan Estimate loan costs and other costs) · checked Nov 10, 2026 |
| Owner’s title insurance | You, the homeowner, if someone claims an interest in the home from before you bought it. | The CFPB describes it as something you may want to buy; most lenders require only the lender’s policy.Source: CFPB: “What is owner’s title insurance?” (Ask CFPB #164, last reviewed Oct 19, 2023) · checked Nov 10, 2026 | Section H (Other), if you choose to buy it.Source: CFPB: “What are title service fees?” (Ask CFPB #157) · checked Nov 10, 2026 The label begins with “Title —”.Source: 12 CFR 1026.37(f)(2)–(3) and (g)(4) (Regulation Z: Loan Estimate loan costs and other costs) · checked Nov 10, 2026 |
- You can usually shop for a title insurance provider separately from your mortgage. If you buy an owner’s policy, the total is usually lower when the same provider issues both policies.
- Depending on the state, the settlement agent, attorney, lender, real estate agent, or title company may give you an itemized fee list at closing that is presented differently from your Loan Estimate or Closing Disclosure. That doesn’t necessarily mean you’re being charged the wrong amount.Source: CFPB: “What is owner’s title insurance?” (Ask CFPB #164, last reviewed Oct 19, 2023) · checked Nov 10, 2026
More on Loan Estimate sections: Closing costs explained. Comparing the Closing Disclosure with the Loan Estimate: Loan Estimate vs. Closing Disclosure.
Liens
A lien is a legal claim against property that secures a debt or obligation. A title search looks for recorded liens so they can be paid off or otherwise handled before or at closing. Four common kinds:
- Mortgage or deed of trust. The loan that buys the home is secured by the home itself. Federal disclosure rules describe a home purchase loan as one in which a mortgage, deed of trust, or equivalent consensual security interest is created in the consumer’s principal dwelling, and a security interest as an interest in property that secures a consumer credit obligation.Source: 12 CFR 1026.2(a)(24)–(25) (Regulation Z: residential mortgage transaction; security interest) · checked Nov 10, 2026
- Property tax liens. Unpaid property taxes can become a claim against the home itself, not just against the owner.
- Homeowners’ association (HOA) liens. Where state law and the community’s documents allow, unpaid HOA assessments can become a lien on the home.
- Mechanic’s liens (called construction liens in some states). People who do work on or supply materials for a home, and aren’t paid, may have a lien right under state law.
Here is what the California, Florida, and Texas statutes say about these liens.
California
- Tax: every tax, penalty, or interest on real property is a lien against the property assessed.Source: California Revenue and Taxation Code §2187 (amended Stats. 2002, ch. 206) · checked Nov 10, 2026
- HOA: unpaid assessments, plus collection costs, late charges, and interest, become a lien on the owner’s separate interest once the association records a notice of delinquent assessment with the county recorder.Source: California Civil Code §5675(a) (common interest development assessment lien) · checked Nov 10, 2026
- Mechanic’s: a person who provides work authorized for a work of improvement, such as a direct contractor, subcontractor, or material supplier, has a lien right.Source: California Civil Code §8400 (mechanics lien right) · checked Nov 10, 2026
Florida
- Tax: property taxes are a first lien, superior to all other liens, from January 1 of the year they are levied until paid (or until barred by law).Source: Florida Statutes §197.122(1) (lien of taxes; 2026) · checked Nov 10, 2026
- HOA: when the governing documents authorize it, the association has a lien on each parcel for assessments. A new owner is jointly and severally liable with the previous owner for unpaid assessments that came due up to the transfer of title.Source: Florida Statutes §720.3085(1), (2)(b) (homeowners’ association assessments; lien claims; 2026) · checked Nov 10, 2026
- Construction: a contractor, or a laborer or materialman in privity with the owner, can have a lien on the improved property for unpaid amounts, but no lien under that section is acquired until a claim of lien is recorded.Source: Florida Statutes §713.05 (liens of persons in privity; 2026) · checked Nov 10, 2026
Texas
- Tax: on January 1 of each year, a tax lien attaches to property to secure the taxes, penalties, and interest for that year, in favor of each taxing unit. It is perfected on attachment.Source: Texas Tax Code §32.01(a), (d) (tax lien) · checked Nov 10, 2026
- Mechanic’s: a person who, under a contract with the owner or the owner’s agent, contractor, or subcontractor, labors or furnishes labor or materials for construction or repair of an improvement (among other listed work) has a lien.Source: Texas Property Code §53.021 (persons entitled to a mechanic’s lien) · checked Nov 10, 2026
Liens like these are one reason title insurance exists: the CFPB’s examples of claims an owner’s policy can protect against are a previous owner’s unpaid taxes and unpaid contractors.Source: CFPB: “What is owner’s title insurance?” (Ask CFPB #164, last reviewed Oct 19, 2023) · checked Nov 10, 2026
Home inspection vs. appraisal
| Appraisal | Home inspection | |
|---|---|---|
| Purpose | Estimates the home’s value for the lender. | Looks at the home’s physical condition for the buyer. |
| Who arranges it | Part of the loan process. | Only happens if you arrange one. |
| What it covers | Value. It doesn’t replace an inspection. | Condition of the structure and major systems, their remaining useful life, and items that need repair or replacement. |
FHA: “For Your Protection: Get a Home Inspection”
FHA’s form HUD-92564-CN says:
- A home inspection will only occur if you arrange for one; FHA does not perform home inspections.
- An appraisal is required to estimate the home’s value for your lender and does not replace a home inspection. FHA does not guarantee the value or condition of the home, and if you find problems after closing, FHA can’t give or lend you money for repairs or buy the home back.
- If you request an inspection early, you may be able to make your purchase contract contingent on its results.
- Ask a prospective inspector for their Standards of Practice or a sample report. The form also notes that the EPA and the Surgeon General recommend radon testing for all houses, and suggests asking the inspector about other health and safety tests.
VA: Minimum Property Requirements
- VA sets Minimum Property Requirements (MPRs), and a property must meet them before VA guarantees the loan. They help ensure the property is safe, structurally sound, and sanitary, and also cover location and legal issues.
- VA’s handbook says an appraisal is not a home inspection. The appraiser must note readily apparent repairs, but won’t do operational checks of mechanical systems or appliances; the appraisal estimates whether the value is enough for the loan.
- When repairs appear needed to meet MPRs, the appraisal is made “subject to” those repairs. Appraisers recommend repairs, not further inspections, and shouldn’t recommend repairs of cosmetic items or normal wear and tear.
For a first-lien home loan, the lender must give you a copy of the appraisal: see getting a copy of the appraisal.
Inspector licensing
Florida
A person may not practice or offer to practice home inspection services without complying with the state’s home inspector law, and licenses are issued by the Department of Business and Professional Regulation.Source: Florida Statutes §§468.8311, 468.8314, 468.8319(1)(a) (home inspectors; 2026) · checked Nov 10, 2026
Texas
A person may not act as a professional inspector for a buyer or seller of real property without a professional inspector license, issued under the chapter administered by the Texas Real Estate Commission.Source: Texas Occupations Code §§1102.001(3), 1102.103 (real estate inspectors) · checked Nov 10, 2026
Home warranties
A home warranty is a service contract that may pay to repair or replace certain home systems and appliances when they break down, under its own terms, limits, and exclusions. It isn’t homeowners insurance, it isn’t an inspection, and it isn’t the same as a builder’s warranty on new construction. Read the contract to see what is covered and what a service call costs.
If you buy one at closing and the lender knows about it when it prepares the Loan Estimate, it is listed under “Other” in the Other Costs table. Federal rules require “(optional)” at the end of the label for premiums paid for separate insurance, warranty, guarantee, or event-coverage products.Source: 12 CFR 1026.37(f)(2)–(3) and (g)(4) (Regulation Z: Loan Estimate loan costs and other costs) · checked Nov 10, 2026
Questions to ask
- Is the lender’s title insurance in Section B or Section C of my Loan Estimate, and can I choose the provider?
- Am I buying an owner’s title policy, and is the price shown with or without the lender’s policy from the same provider?
- Did the title search find any liens, and how will each one be paid off or released at closing?
- Is the home in an HOA, and are its assessments paid up to closing?
- Has recent work been done on the home, and has everyone who did it been paid?
- Have I scheduled a home inspection, and is my contract contingent on it?
- Is the inspector licensed where my state requires it?
Guidelines change; confirm with a licensed lender.