Now that you have just discovered your dream home and managed to get a good deal, what’s next? Title insurance allows you to reduce your expenses. You might be asking what kind of expenses? The previous owner has owned the home for the last thirty years and so why would there be any title issues? Well, let’s see.
What is Title Insurance?
First, what is title insurance and why is it necessary? When you buy real estate property, you cannot hand over cash and walk away with the keys to the home right away. You have to get title to the property first, giving you a right to own and use the property.
Who is on the Title?
A home can be titled in various ways. For instance, two people can own the property as tenants in common or joint tenants. You can own the property with rights of survivorship if the other person dies.
So Many Possible Issues
In some cases, an individual other than the owner of the property might have utility rights to the property. The mortgage lender also has an interest in the property. An individual who has worked on the house and wasn’t paid could file a lien against the property.
If the previous owner owed the government taxes, a lien could be placed against the property. The local city might have an easement or right to put up utility poles in your front yard. So, you are going to need title insurance to deal with these potential problems.
Search the Title or Not?
A title search is the immediate solution to potential problems in a real estate transaction. The title company will examine public records to see the history of the property and its owners. If you are using a mortgage loan to purchase the property, the lender requires that a title search be done. So, there is no way around that unless you have enough money to buy the home for cash.
Be aware…The title search will show restrictions for using the property, current liens against the property, the rights of others and any outstanding monetary obligations against the property.
You Need Coverage About Title Insurance
Once you are aware of any problems with the property, you must secure title insurance. Those problems are not just going to go away immediately. Title insurance provides similar coverage to that of a homeowner’s insurance.
If you were to have a fire in your home and it burned down, you would be covered with homeowner’s insurance. The title insurance includes the occurrence of these potential problems. In other words, were they to happen, you would be covered.
Before the title company offers the issuance of a policy, a title search is done to minimize any risks of claims. During the title search, the title company will also discover any outstanding mortgage loans, incorrect names on deeds, living wills, forged documents, inherited property, allocation of property in a divorce and inaccurate notary acknowledgements.
You have to do what is in your best interest to be confident about your rights as owner of the new property that you purchased. To do so, you need title insurance and only a title company can help you. Contact a title company today!