If you are a first time home buyer it can be difficult to navigate the ins and outs of the real estate world and all that comes along with it. Today we’re going to discuss Title Insurance and why it’s important that you check off that box when purchasing real estate.
Title Insurance is not just important for first time home buyers. It’s important to make sure you are protected in the event that something in the past has not been settled. If an issue pops up and you don’t have Title Insurance you could be wind up losing your home before you have a chance to make it your own. Let’s take a look at Title Insurance and what it can do to protect you in the event of an unforeseen problem with your property.
What Is Title Insurance & Why Do I Need It
The purpose of a Title Insurance Policy is to protect the new owner’s interest in the property from things that happened in the past of which the new owners would have no knowledge without a title search. Problems with titles can limit your use and enjoyment of real estate and have negative financial consequences.
How do I get Title Insurance?
Your realtor will ideally help you secure Title Insurance along with all of your other paperwork during the buying or selling phase.
The process beings with a search of the public records for matters than affect both the property and the individuals linked to that property both past and present.
If something comes up, further research must be done to make sure that you are protected from these past issues.
What can I expect to find during a title search?
Here are some examples of the kinds of issues that appear on title searches:
- Outstanding mortgages, deeds of trust, judgements, or tax liens
- Deeds, wills, and trust that contain improper vesting, incorrect names or incorrect legal descriptions
- Incorrect notary acknowledgements
- Easements, Cc&Rs, and rights of other parties
Even with all the expertise that goes into a title search things can pop up during and after escrow that can have a hugely negative impact on the process and on you as an individual.
What kinds of things could cause problems for me if I don’t have Title Insurance?
These are some of the issues that can arise and be disclosed during a title search, Title Insurance protects your interest in the property in the event of:
- Previously undisclosed heirs with claims against the property
- Forged deeds that purport to affect the title of the property
- Mistakes in the public records including but not limited to erroneous legal descriptions and the misspelling of parties names
How does title insurance protect you?
It gives you the security and protection against the many title issues that can arise which could potentially result in the loss of your home. In these cases, title insurance helps keep you from losing what may be the single most substantial investment of your life, your home.
Does everyone involved need Title Insurance, or just first time home buyers?
Lastly, when you are buying or selling real estate you might notice two Title Insurance policies.
One is taken out for the owners which ensures that the property is being conveyed or transferred to the new buyer at that time free of any issues (like the ones listed above).
The second one is taken out on behalf of the buyer which comes into play when the buyer is obtaining a loan to purchase the property and is required to protect the lender or lenders against title issues which would impact the value of the property going forward.
Here’s a video about Title Insurance to help you further understand the process!
Title insurance is very important, I hope this helps you understand what it is and why you need it! If you have questions about this process or if you have other real estate needs you can contact me today! I’m happy to help guide you through all of your home buying and selling needs.