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Insuring Home Ownership
By Matt Unangst, 23 Jan 11:06
• Most lenders require title insurance
• Title insurance protects your ownership of a property
• Title insurance costs vary widely based on property value and location
• Real estate can be transferred without a public record, meaning someone could have rights to your property that you can have no way of knowing about
• Title companies focus on clearing up any problems before they arise
• Some title insurance firms made huge profits during recent housing boom
When buying a piece of real estate, one of the many hassles you will have to deal with is acquiring title insurance. Title insurance is recommended for everyone and most lenders require it before they will issue a home loan. Title insurance protects your title to a property from attack.
Many people do not fully consider the risk of anyone challenging their ownership to property. After all, the property has gone through a lengthy selling process during which any number of people have examined details of the property. Property law in most states is full of minutiae that make determining ownership of a property difficult. One of these is that real estate can be conveyed to another person informally, often b y merely writing and signing a real estate deed naming the person to whom the property is to be conveyed. Theses deeds are sometimes recorded, but reporting is not mandatory, so many of them are unknown to anyone except their holder. Someone with a deed to your property could appear years after your purchase and challenge your ownership.
To prevent problems like this, which can escalate into long and costly legal battles, possibly costing you title to your property, title companies offer title insurance services. Title companies spend most of their time searching public records for any possible challenges to your title. Each has a massive database of property information often stretching back over a century. While this search clears up over 99 percent of all problems with titles, some possible challenges will always slip through. Title insurance also provides claims assistance, taking care of any legal issues that arise from challenges to your title. If the title company is unable to find a clear chain of ownership from the property’s original owner to you, they may include exceptions to their coverage. You should try to avoid having any exceptions to your title insurance coverage.
Title insurance costs vary widely from property to property. Costs are based on the value of the property and its location. Rules vary as to responsibility for title insurance costs. Some areas require the buyer to pay for the insurance, while others require the seller to buy the coverage. Title insurance costs are low compared to the calamitous event of losing title to your property.
A number of title firms brought in huge profits during the recent housing boom. The best known of these companies are Fidelity National, First American, and Stewart Information Services. These companies should continue to do well because most lenders require title insurance before issuing a loan.
KEYWORDS: title insurance, title company, real estate, buying a home, selling a home, real estate, fidelity national, first American, stewart information services
SEE ALSO: About Homeowner’s Insurance, About Home Warranty Insurance, The History of Title Insurance in California, Title Insurance: Where Does Your Dollar Go?, Title Insurance
Tags: home owner's insurance