When real estate is SOLD, the Seller is responsible for title evidence, in the form of an updated abstract or title insurance policy. The Buyer's lender may require title insurance, depending on the type of financing involved. Rarely requested today, an Abstract is a history of the title to property as revealed by the public records, from which an attorney may give an opinion as to the condition of the title.
Title Insurance is insurance against loss resulting from defects of title to a specifically described parcel of real property. A search of the public records as reflected in an abstract may not uncover certain "hidden" title defects such as fraud, improperly indexed documents, forged deeds or other documents, unknown heirs and false affidavits. Generally, title insurance, unlike an updated abstract, provides protection for the owner and lender against direct loss and costs and expenses connected with legal defense against claims.