Hidden title risks

that would not be found during the most extensive search of public records:

Forgery
Fraud in connection with the execution of documents
Undue influence on a grantor or executor
False personation by those purporting to be owners of the property
Incorrect representation of marital status of grantors
Undisclosed or missing heirs
Will not properly probated
Mistaken interpretation of wills and trusts
Mental incompetence of grantors
Conveyance by a minor
Birth of heirs subsequent to the date of the will
Inadequate surveys
Incorrect legal descriptions
Non-delivery of deeds
Unsatisfied claims not shown on the record
Deeds executed under expired or false power of attorneys
Confusion due to similar or identical names
Dower or courtesy rights of ex-spouse or former owners
Incorrect indexing
Clerical errors in recording legal documents
Delivery of deeds after the death of a grantor

[Source: Investor's Title]

Title search fees- A title search ensures that the person saying they own the property is the legitimate owner. A title company extensively examines public records such as deeds, records of death, court judgments, liens, contests over wills, and other documents that could affect ownership rights. This is an important step in closing your loan because it assures that there are no outside claims against the property. The fees charged for title searches are usually based on a percentage of the property cost. They typically range from $300 to $600 or more, depending on the area.

Title insurance- Just in the event that the title company made an error when they did the title search, or there was information that was not available in the public records, there is title insurance. It will prevent you having to pay mortgage on property you no longer legally own. Lenders will require title insurance to protect their investment, but you may also want to get your own policy. Title insurance has only a one-time fee that covers your property for the entire length of time you or your heirs own it (usually 0.2 to 0.5 percent of the loan amount for lender's title insurance, and 0.3 to 0.6 percent for owner's title insurance). It is also one of the least expensive types of insurance. If the previous owner of the property owned it for only a few years, you may be able to get title insurance at a "re-issue" rate, which is usually lower than the regular rate.