Protecting Your Home with Title Insurance
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The biggest investment you will make in your life will probably be purchasing a home. So before you close, you need to know that no one else has a claim to the property.
A title company does all the research to insure that a property has clear title. Making sure that a property is clear of all legal encumbrances is the job of a title company.
For a modest, one-time title insurance premium, you will receive continuous title insurance protection equal to the purchase price of the property or its current market value.
The title insurance company performs an extensive search on the title history of the property. Through its research, the title insurance company can usually find any title problems and have these problems cleared-up prior to closing.
Because Real Estate Law is so complicated, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem selling your property. Your owner's policy will describe the property and outline any recorded limitations on your ownership. It will also cover what the title insurance company is responsible for. Title insurance covers the following:
- Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. If this happens, the title company will defend your title and will cost you nothing.
- Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Defects are rare, but they can be very difficult, making the property inaccessible, unbuildable, or unsaleable. Any number of other complicated problems define "Defective title." The title insurance policy will protect you from these errors if the title company misses them.
At Real Property Finance, we answer questions about this process every day. Give us a call: 310-379-5997.
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