Buying any real estate, from a modest home to a large commercial property, is a big investment. In the case of residential property, it can be the largest investment the homebuyer will ever make. Real estate ownership is also complex, and some properties have a long history of previous ownership. Over the years, it may have changed hands many times. Anywhere in that history, there could be an issue that interferes with your home ownership. That’s the reason title insurance exists. Issued at the time of transfer of ownership, title insurance protects you from financial loss in the case of an adverse condition. Title insurance companies protect their policyholders’ titles by engaging in legal cases regarding a disputed title and offer assurance that the current owner is protected from financial loss.
THE TWO TYPES OF TITLE INSURANCE
If you purchase a property via a mortgage, the lender insists on title insurance as part of the loan agreement. The buyer pays for this in a one-time, reasonable fee that protects the lender throughout the term of the mortgage. Individual title insurance that protects the buyer is optional but highly recommended. This may be issued as a separate policy or in combination with the lender’s policy. Again, a single, reasonable payment protects the buyer from issues that may cloud ownership, as long as the buyer owns the property. Some of the things that can pop up, even years after you buy the property, include:
- Deeds, wills and other documents that contain forged signatures, etc.
- An unknown heir of a previous owner who may have a claim.
- Invalid documents prepared under an incorrect or expired power of attorney.
- Mistakes in public records.
Title insurance protects against these issues and many others. Trademark Title Services, Inc. offers homebuyers more options to protect their investment. They can choose between two individual title insurance policies: Owner’s Policy or Homeowner’s Policy.
REAL ESTATE TITLE INSURANCE REQUIREMENTS
Before a title insurance policy can be issued, a detailed and complete search is made to discover any issues that get in the way of a clean transfer of ownership. By searching documents and records, a real estate title company, like Trademark Title Services, identifies all of these items and works to clear them:
- Deeds, wills and trusts containing errors.
- Outstanding mortgages, liens, and judgments against the property.
- Easements that allow road or utility construction on the property.
- Pending legal actions against the property.
- Incorrect notary acknowledgments.
- Any other issues that could prevent a legal transfer of the title.
Some things, such as mortgages, are cleared at the time of the sale. Others often require clearance before the sale can take place. In every case, the buyer will be made aware of these issues as a matter of due diligence. With all issues properly resolved, a title insurance underwriter agrees to issue a title insurance policy, and the sale can be completed. This process takes up most of the time that the sale is in escrow.