TITLE INSURANCE, WHY DO YOU NEED IT?

Title insurance is the ultimate property protection! In real estate, “title” means a right to ownership. The title insurance professionals you work with is very important to the sales transaction. If you have clear title to a house or property, it means that you own it free and clear. The document stating your right to a property is also called title.

TITLE HAZARDS

Various kinds of claims can exist to “cloud” a title. Some examples are:

• Long lost relatives or heirs could show up with a claim that supersedes yours.
• Sometimes fraud is involved such as forgery on recorded documents
• Liens dues to foreclosures.(Non-payment of loans to the original lender)
• Easements (rights to use of land for other purposes like utilities, roads, etc.)
• IRS tax liens from the previous owner.
• Divorce situations where proper signatures was not obtained

Keeping it safe: When buying a property, the best way to protect your investment is to obtain the services of a reputable title insurance company to do a thorough title search, and insure you against the chance of some lien or claim being overlooked.

Seller’s Proof: It is general practice in a real estate transaction for the “seller” to purchase the title insurance policy covering the new owner. The understanding is that the seller is providing to the new buyer that the property has clear and marketable title. The buyer receives an owner’s title policy from the title insurance company at the close of the escrow to insure his/her interests. The buyer is generally required by the lender to provide an additional policy of title insurance covering the lender’s interest in the property for the amount of the loan being taken out on the property. This is generally paid for by the buyer and is provided to the lender at the close of escrow. The buyer may want to also purchase an owner’s policy which protects them for an additional minimal charge.

Title Claims: In the unlikely event that an unforeseen claim to a title shows up, your title insurance policy reimburses you for all losses covered by your policy, and may also provide legal support to defend your rights.

As always, consult with your legal advisor for any remedies of law that you may encounter.