The Importance Of Purchasing Title Insurance For Real Estate (2)
It is important to obtain title insurance whenever you purchase real estate, whether you are buying a home, business or investment property. Title insurance protects the buyer of a piece of real estate from loss due to problems with the title, or deed, to the property. These problems can arise due to transactions in the past that were not completed properly. For instance, a husband and wife own a house but she never signs off during the sale. In a case like this, the wife may come back later and claim that she owns half of the house. Title insurance protects you in cases like this.
Title insurance also protects the buyer from liens against the home that they might not be aware of. For example, the IRS can put a lien on someone's house if they are behind on their taxes. The city can place liens if the water bill or other service bills are unpaid. Even contractors who have done work on a house can place liens against. When you obtain title insurance, the title insurance company will check to see if there are liens against the house and they will disclose their findings before you buy. If it is later learned that there was a lien that the title company did not find, then the title company will be responsible to pay the cost to resolve the problem.
If you are getting a mortgage to purchase property, your lender will insist on you getting title insurance. The title insurance protects the lender as well as the buyer. You will not be able to obtain a mortgage to purchase a piece of real estate without purchasing a title insurance policy for the property.
Purchasing title insurance is vital because there is no way that you can know what has happened in the property's past without extensive research. Even then, unexpected things can happen. What happens if you buy the house from a man who inherited it from his grandfather, and then someone else claims that the house should have gone to them and decides to contest the will? Situations like this can be very messy, but if you have title insurance, then the insurance company will have to pay you back for the house, and often your legal expenses as well, if you end up losing it due to problems with the title.
Since you are making a large investment whenever you purchase real estate, you need to make sure that your investment is well protected. There are many things that can affect the title to your property, and obtaining title insurance is the only way to make sure that you won't lose your investment if there turns out to be a problem with the title of your property.
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