Purchasing Real Estate, whether it be land ownership or a house, is the single largest investment you will make in your lifetime. To protect yourself, it is an automatic necessity that you purchase several types of insurance including: home insurance and personal property insurance. There is also additional coverage that should be considered, that being title insurance. Title insurance protects you, the buyer, at the time of purchase against any hidden ‘title’ issues that may threaten the ownership of your new home. After all, you do not really take ownership of the actual land or house, you take ownership of the ‘title’ of that property, which is a legal document stating the rights associated with that property.
What is Title Insurance, How Can A Title Company Protect You?
What title insurance does is it protects you the new property owner, against the potential loss of ownership, when situations associated with the property’s true ownership of title comes into question. The title represents the deed to the property, it is the primary legal document that transfers ownership of the piece of land or home from the previous owner to another. In a perfect world, once the real estate transaction is finalized, the next step is for the seller to sign over the ‘title’ deed over to you, the new buyer. The document states that the buyer is the proud new owner of that property. The majority of the time, it is as easy as that.
However, in certain situations, the true title ownership and rights of the seller of that particular property may come into question. There may be a dispute to the true title rights based on various reasons.
Some Examples Of This May Be…
– The seller had no authorization to transfer the title, but does so anyways. This may happen via a signature forgery, thus committing fraud.
– During divorce proceedings, one spouse may be attempting to sell their joint ownership home without notifying the other. For you to gain title, both spouses are required to sign.
How Title Insurance Protects You
When purchasing title insurance, any potential problems that may exist from a transaction are investigated on your behalf, allowing for a clean Real Estate sale. Title insurance is unique as it protects you as the policy holder from any losses incurred prior to the insurance policy’s release. A title insurance company will protect you from ownership issues and disputes such as: liens on the property, any unpaid taxes, legal ownership etc. All these potential issues are investigated and cleared before the sale is finalized.