Buying a Home! What is Title Insurance?

Real Estate Introduction Perhaps your most valuable asset; a sure form of savings, perhaps a tax shelter or tax deduction but certainly protected by many laws. The ownership of real estate is a big part of the American Dream of financial independence and freedom. Claims against a property may be made by mortgage companies (banks), contractors lending money for improvements, governmental bodies, or other individuals or corporations. Imagine buying a property without the knowledge of others having a claim to the property. Any claims remain until cleared thus passing on to the new buyer.

Don’t Let The Past Haunt You People buy insurance for coverage against future claims due to sudden and accidental occurrences in the future; for instance, homeowners insurance, automobile insurance, business insurance etc… Title insurance is very unique in that it provides coverage for future claims created by past events. The risks covered by Title Insurance are not easily detected but could be devastating if found after purchasing a property.

Is Your Title Clear? It would be foolish to purchase a property without a clear title. During the escrow period of a purchase contract, a Title Insurance Company will prepare a Preliminary Title Report to show any present claims to the property; all prior claims should be settled in Escrow and upon closing escrow and Title Transfer, a Title Insurance Policy is issued to protect the right to the property for the new owner.

Title Search To Discover Claims Title insurance companies conduct a diligent search of public records for any documents associated with the subject property. The Title Company examines the recorded documents to determine whether there are any rights or claims that may impact the buyer. The title search may reveal recorded defects, liens or encumbrances on the title such as unpaid taxes, unsatisfied mortgages, judgments and tax liens against the current or past owners, easements, restrictions and court actions.

Title Insurance Protection Title insurance offers you the security of title when purchasing a property; any clouds or encumbrances are searched and reported before the final sale, and if there are any undiscovered claims, the title insurance policy will either settle them, dispose of them , provide legal defense or reimburse the buyer as detailed in the title insurance policy contract.

Term Of Title Insurance Only one premium is paid for as long as the owner holds title to the property; no follow up payments will be required until another mortgage or sale transaction needs to be recorded at which time a new title insurance policy will be required.