Title
insurance is always the first thing on your mind when you think of
buying a house, right? Of course not! The team at Regal Homes knows that
“Title Insurance” is something most buyers don’t fully understand until
the day of closing therefore we would like to help shine some light on
this often overlooked but very important detail.
There
are two main aspects to Title Insurance. First the title company or
whatever entity is performing the final closing, searches and
investigates property records to ensure everything checks out. They look
for possible undisclosed heirs, clerical errors, errors or omissions in
deeds, mistakes in examining records, forgery, open permits, liens
which have not been disclosed, fraud surrounding the deed or basically
anything that reveals an issue that won't allow the seller to convey the
property to the new owner free & clear. When these types of issues
arise the title company along with the real estate team are most often
able to correct issues for a clear title in order to close.
The
second part of title insurance is the actual insurance. The title
company uses an underwriting agency to issue an insurance policy.
Typically there are 2 policies issued, one for the buyer and one for the
lender. The buyer’s policy is referred to as the “Owner’s Title
Policy”. In the event that anything was missed during the title search
then this policy will insure the new owner against many of the possible
unforeseen issues. The owners policy is paid by the buyer at closing,
it's a one-time fee and lasts the duration of ownership, even extending
to heirs. This is the title company's guarantee that they will represent
their buyers and provide whatever funds and/or legal representation is
needed if such a situation should arise. The second policy is called a
“Lender's Policy”, lenders require this when they issue a loan and it is
based on the dollar amount of the loan. As the name implies, it
protects the lender if a title problem surfaces. The policy amount
typically will decrease each year as the loan is paid off.
Although
title insurance is not required by law, it's strongly recommended and
it's no surprise why. Equally as important to having title insurance is
making sure the title company is reputable, most often the real estate
agent helping to facilitate the transaction will be able to recommend a
few title companies. A good agent or the lender will also help ensure that the title insurance has been ordered early in the process to avoid any potential delays with closing. Title insurance is just one small part of the overall real estate transaction which is why it's beneficial to go through the home buying process with a great team behind you, it makes a big difference to know you are in good hands.
The Regal Homes team is always available if you have any further questions about title insurance or any aspect of real estate!
