What is the primary purpose of title insurance in real estate transactions?

The primary purpose of title insurance in real estate transactions is to protect against losses due to defects in a property's title. Title insurance serves as a safeguard for both buyers and lenders by providing coverage for any issues that may arise related to the ownership of the property. These issues can include liens, encumbrances, or disputes over property boundaries that were not discovered during the title search process before the sale.

By having title insurance, property owners and lenders can have peace of mind knowing that they will be financially protected against any claims that may arise after the transaction. This coverage is crucial because it ensures that any historical issues with the title do not adversely affect the new owner’s right to the property.

The other choices focus on different aspects of real estate transactions not directly related to the core function of title insurance. Appraisals, legal representation in disputes, and facilitating sales are all important components of real estate processes but do not encompass the specific role that title insurance plays in protecting property owners from title-related risks.