When you purchase a piece of real estate, you want to have the confidence that you are doing so because it is free and clear. You want nothing clouding the title or jeopardizing your rights to the property. Hence the reason why you have a title search done.
Does it make sense to purchase a title insurance policy, too? What does title insurance cover?
There is a lot of time, effort, and money that goes into buying a piece of property - and you just want to sign the papers, get the keys, and move on in. It is understandable. But when asked about title insurance, know all of the facts before you answer.
Title Insurance: Understanding Your Coverage
The title company you hire will do a thorough search of the deed and other recorded documents attached to the property, going back to the beginning of its existence. They make sure that the chain of title is solid and clear as well as free of any judgments, liens, encroachments, easements, and so forth. Everything must line up perfectly for a green light to be given to move ahead with the property transfer.
In order to obtain a title insurance policy, you need this positive feedback on the title search. Let’s take a look at an example of why this is so important.
You buy a piece of property that has a $9,000.00 tax lien on it. The title search was done and it came back that it was clear. As a result, this tax lien that no one caught now becomes your responsibility. You didn’t even own the home when those taxes accrued, but since the home is now yours, so is the tax lien. If the lien was discovered as part of the title search, the seller would have been required to clear up the lien before the property would be sold.
With a title insurance policy, anything like this is taken care of - without you having to handle it. You’d simply reach out to your title insurance company and file the claim.
What Does Title Insurance Cover?
Title insurance is a one-time fee at closing and you gain a policy for as long as you have an interest in the property. If you are financing the property, your lender may require you to also purchase a lender’s title insurance policy. It is the same thing except it protects the lender’s interest in the property - not yours.
In general, title insurance covers most challenges to your title, including:
Tax liens
Mechanics liens
Judgments
Forged documents or fraudulent signatures
Erroneous recordings
Missing heirs
Easements
Encroachments
Many different unexpected things may happen, jeopardizing the ownership rights to your property and title insurance will cover these threats when they happen. But the most important thing that title insurance covers is you. It makes sure that nothing can get between you and your dream home.
Regardless of how confident you feel in your title search, you never want to disregard the importance and value that comes with having your title protected.
Learn More About What Title Insurance Covers at Reputation First Title Agency
Whether you have questions and would like to learn more about title insurance or if you are interested in purchasing a policy, Reputation First Title Agency is here for you. We will guide you every step of the way to ensure that you are protected.
Contact us today at one of our two convenient offices:
Livonia (734) 432-0100
Shelby Twp (586) 612-5400
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