Tag: title insurance

Whiteboard Topics: What is Title Insurance?

Posted on Linda Thach

One thing in a real estate transaction that some people may not understand is title insurance. They may ask themselves “What is it?” and “Do I really need it?” To navigate the confusion or uncertainty, here are three things to know about title insurance.

  • Right to Sell. Title insurance is basically just insurance that guarantees that the seller has the right to sell that property. There can be a lot of confusion surrounding whether someone has the right to sell a property — whether that be fraud, a mistake, or ownership uncertainty — but title insurance can help clarify and clean up that misinformation. 
  • Clients Can Shop. You can shop around for title insurance that best fits your needs. The price of title insurance typically reflects the sale price of your home, and relative to many of the other costs involved in a real estate transaction, it isn’t that expensive. Though there are laws in place to protect buyers and sellers from fraudulent title insurance companies, you always have the option to shop around and get prices from various suppliers. 
  • One-Time Cost. This is not a recurring payment. It is a one-time cost that takes place at a closing. Once the title insurance company is paid, they will do additional filings and verifications at the courthouse, and several days later, the buyer will receive their policy.

Whether you’re buying or selling your lake home or property, our agents at Lake Homes Realty can help provide insight into today’s lake real estate market and guide you in your home journey.

Home Buying Basics: What is Title Insurance?

Posted on Glenn S. Phillips

what is title insuranceOnce you buy a home, you will need to be sure there are no issues with the title of the home. If there is a problem with the title, then it can limit the use and the enjoyment of the new property. It can also bring on financial loss.

Title Search

Once the sales contract is accepted, a professional of titles will then search for public records in order to look for any potential problems with the property’s title.

The search will normally involve a review of any land records that go back several years.

It is the job of the professional to fix the issues before the closing on the property. For example, if a previous owner had minor construction completed on the property, but has never paid the contractor; it is the job of the professional to solve the issue.

Owner Title Policy

There are times when a problem can occur that cannot be found by the public records or are missed during the search process. In order to help protect you, it is highly recommended that you have an Owner’s Policy of Title Insurance. This will ensure that you will not be subject to any issues that are unforeseen.

The Owner’s Title Insurance, also referred to as Owner’s Policy is typically issued in the total amount of the property purchase. It is a one-time fee during the closing and will last for as long as you or any heirs have interest remaining on the property. Only the Owner’s Policy will fully protect the buyer and should a covered title issue come up that was not found during the search, it will be taken care of. Possible issues that can arise are:

  • Mistakes in Records
  • Forgery
  • Errors or even Omissions in the Deed
  • Undisclosed Heirs

The policy will provide the assurance that the title company will stand behind the buyer monetarily and will provide legal defense should it be needed. The bottom line is the title company will be there to aid in any valid claims. You are also even able to purchase expanded coverage.

It is called Homeowner’s Policy and it will cover other things that the Owner’s Policy does not cover. Talk to the local title company and ask for an explanation of the Homeowner’s Policy they can offer you.

Loan Policy

There are different types of title insurance. Owner’s Title Insurance and Lender’s Title Insurance. Most of the lenders will typically require a Loan Policy in which they will issue a loan.

The policy is normally based on the amount of the loan. It will only protect the lender’s interests in the home. Should an issue come up, it will protect the lender.

It does not help the buyer. The policy amount will decrease with every year and will ultimately disappear as you pay off the loan. The bottom line is that the policies are crucial in order to protect you from unforeseen issues that may come up before and after purchasing your home.