WHY DO I NEED TITLE INSURANCE, AGAIN?

WHY DO I NEED TITLE INSURANCE, AGAIN?

Real estate is a part of everyone's life. We see real estate for sale or lease on a daily basis via Internet, television, radio, and newspaper. The definition of title means an owner has the right to maintain or sell real estate in his/her possession. The owner has the right to enjoy the property. Title is the history of ownership of a parcel of land. Title companies do title searches to ensure that a buyer will have clean title when purchasing a piece of real estate. They want to ensure there is a true hand over of the property to the new owner without any blemishes on title. This service is provided by your local title agency. Title is another word for "right" or "interests" when it comes to real estate.

A title insurance policy is written against the property after thorough research from the title company. Title insurance is the company's opinion concerning ownership and marketability of title on the property. The buyer is purchasing the title insurance from experts. This means the title company is backing their research and willing to issue a title insurance policy on the land. Title insurance policies do not cover the following:

  • Defects in title known to the insured
  • Liens not on public records
  • Easements
  • Interests of parties in possession
  • Survey matters

The reasons for issuing title insurance are twofold. The mortgage company wants to ensure that they will be able to put a mortgage on the property with no issues. The buyer wants to enjoy the property they just purchased with no problems. The owner wants to make sure that their real estate is marketable and will be able to sell, lease, or mortgage the property with no worries.

The title insurance policy protects the lender if there is a title issue. One must purchase an owner's policy to protect oneself. If not, it would be very costly if a title issue would arise down the road. Many times you can ask for a lower rate if you purchase from the seller's previous title company. I always believe in asking for a discount.

Conclusion

First, I would advise to ask the escrow title officer to explain the title insurance policy in detail in what it covers and does not cover. The escrow title officer is a great source of information since they perform this type of service on a daily basis. Another person to ask would be a real estate lawyer. I would highly advise to hire a real estate lawyer for an hour or two to review the title insurance documentation for one's protection.

Make the Call, Set the Plan, Do the Deal$!

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Comment balloon 5 commentsHarry F. D'Elia • April 29 2012 11:13PM
WHY DO I NEED TITLE INSURANCE, AGAIN?
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