What happens if a title insurance policy identifies issues during a title search?

When a title insurance policy identifies issues during a title search, it is crucial to resolve those title issues before closing on the property. This is because any outstanding issues can create legal claims against the property that could affect ownership rights, making it risky to proceed with the transaction without addressing them. Resolving these issues might involve clearing liens, addressing ownership disputes, or ensuring that any necessary agreements or documentation are in place.

By ensuring that all title issues are resolved prior to closing, both the buyer and the lender can protect their interests. This process also helps prevent potential litigation or claims against the title in the future. If issues are not resolved, it can lead to complications and disputes that undermine the buyer’s ownership or the lender's rights to the property.

The other choices suggest scenarios that may not necessarily reflect standard practices in title insurance and real estate transactions. Insurers typically won’t just negate coverage without attempting to resolve issues, nor will they issue a policy without modifications if problems exist. Moreover, withholding sale proceeds indefinitely is not a standard practice that aligns with property transactions in this context.