Why you need it.
Imagine you happily cooking dinner or watching TV in your brand new home, when a stranger knocks at your door claiming that this is his home. He even shows you a document that the seller didn’t have the right to sell you the house because he wasn’t divorced yet, and he didn’t sign all the documents. Or the visitor shows you a lien on the property that the seller did not know it existed, and that it was not recorded. This person could show you that you were a victim of fraud in the sale of this property, with a false deed, sold by an owner vacationing on someone’s property… So many things could have gone wrong… Such a nightmare… How could you have prevented this from happening to you?
Working with a Licensed Realtor® is the first step to a successful purchase. In the closing process, title insurance should be purchased to prevent these types of surprises, protecting you from losses due to title defect, liens or other matters. It will reimburse the insured for the actual monetary loss up to the dollar amount of insurance provided by the policy against any lawsuit attacking the tittle.
These claims against the title could be:
- Unrecorded liens or debts
- Unrecorded easements or access regulations
- Forgery of deed documents or impersonation of the seller
- Incorrect recording of deeds, including omission or undisclosed errors
- Incorrect information
Most financing institution when lending money for the purchase of a property will require title insurance to protect their collateral investment. This type of insurance is issued on the amount of the mortgage loan, and as the loan is paid, the amount of coverage decreases as the mortgage is paid off. On cash purchases, title insurance is not required, and many people forego the expense, which is a very risky choice.
Doing Your Own Title Search.
If you prefer not to spend the money on title insurance, you can take steps to conduct an independent search yourself at the local county clerk’s office to check for any liens or judgments recorded against the property. Under the Uniform Commercial Code or State Regulations, the Secretary of State’s office must provide you with information regarding the filing of financing statements.
The nearest U. S. District Court to the property can provide you with information regarding any bankruptcy proceedings currently pending involving the seller or prior owner. You can also contact the local building or fire department to determine whether there are any structural violations recorded in connection with the property and whether a valid certificate of occupancy has been issued. While it is less expensive doing your own search, the amount of time involved may outweigh any potential savings. You are also unprotected in the event of a legal crime.
A title insurance is a protection that will safeguard your investment and prevent future headaches, and it will let you have your dinner peacefully, let you watch your TV shows with your family uninterrupted, and give you the peace of mind you deserve to enjoy your newly purchase property.
For more information, please contact me, and buy with confidence.