Showing posts with label Title insurance. Show all posts
Showing posts with label Title insurance. Show all posts

Saturday, January 21, 2017

Everything You Wish You Knew About Title Insurance

Title insurance is a two-part transaction. When you purchase the title insurance policy, the title company conducts a public records search on the parcel. 

This records search may turn up liens, taxes and other unpaid claims against the property. The insurance policy also verifies that the seller actually owns the property and has the legal right to sell it. 

When purchasing title insurance, you will want to know these important details.

What Title Insurance Covers

Title insurance covers legal judgments, unpaid bills and claims against a property. For example, if the past owner did not pay their city water bill, the title insurance will protect you against that lien. 

Title insurance also protects you from past court judgments of a spouse or heir to the property.

How Much Coverage Do You Need?

The purchaser of the home or property is responsible for paying for the title insurance policies. You must pay for the owner's policy, which will cover you, and the lender's policy, which covers your loan. 

A federal law, called the Real Estate Settlement Procedures Act or RESPA of 1974, stipulates that no entity can require you to work with a specific title insurance company. 

Your owner's title insurance should cover the value of the property. The Lender's policy should cover the loan amount.

Title Insurance

The point of title insurance is to protect you against any liens, unknown heirs or claims against the property that you want to buy. 

If you are taking out a mortgage, your lender may require that you purchase title insurance. Professionals, like those at TitleSmart, know that the insurance policy protects both you and the lender from any unexpected encumbrances against the property's deed. 

The policy may include other risks, such as bail bonds, divorce degrees, wills and court judgments involving the property.

Frequency of Deed Defects

According to the Bank Rate website, one in three properties has a deed defect that is covered by title insurance. 

In most cases, these defects are discovered and resolved before the closing of the real estate transaction. Some of the most common deed defects include unpaid utility bills, unpaid taxes and undisclosed heirs and spousal claims.

Purchasing a home or piece of property could be the largest financial transaction that you make in your lifetime. 

Title insurance protects you personally and financially against unforeseen circumstances. Be sure to hold on to the paperwork related to the title insurance indefinitely, even after you sell that piece of property.

Wednesday, November 26, 2014

Why You Absolutely Must Perform a Land Title Search When Buying Property

If you’ve ever bought a new property, you’re familiar with all of the paperwork involved. In days past, closing on a property could seem like it takes forever. If you have to close on one property that you’re selling before closing on another that you’re buying, the whole process can turn out to be an all-day affair. Technology is changing some of this, and closing on a property is becoming much easier.

But that doesn’t mean that the need for the information behind the paperwork has gone away, the process of gathering it is just becoming more efficient.

If you talk to a real estate professional, they would assure you that they’re not interested in wasting anybody’s time, but that the paperwork behind real estate transactions is very important and protects you as a buyer. One such important piece of paperwork is a land title search that must be done before buying a property.

A land title search will tell you if anyone else has any claims against the property before you buy it. When you perform a land title search before purchasing a property, you will uncover any liens against the property will become your responsibility once you take ownership of it. You don’t want the purchase of your dream home to become a nightmare because a previous owner had a judgment against them for unpaid back taxes.

It’s not necessarily that rare that things like this are uncovered during a land title search, either. In fact, almost one-third of land title searches uncover some type of problem with the property. What might be discovered? Any item that hasn’t been paid by the previous property owner could be a potential problem for the new owners.

Things like unpaid contractor bills, back taxes, fees from the local government and other types of civil judgments against the property will be revealed. Even something as seemingly inconsequential as an error or typo in a previous deed can mean problems for the new owners. 

It’s not always the case that the current owner is being deliberately deceitful, either. In fact, the current owner might not have any idea that there are current liens on the property. If a complete title search wasn’t performed when that person bought the property, something might have slipped through. By doing a complete and proper title search this time around, you can make sure that all issues are resolved before you buy the property.

A real estate practitioner can help do this search for you and make sure that all of your bases are covered. They will search through public records, court records, plans and dealings directories as well as many other places. The entire process is automated and takes only a couple of clicks for the real estate practitioner to search many places at once.

A land title search is simple to do and can save you headaches and frustration later on. Be sure to have one done when buying a property.

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