Title Insurance: What Is It?... Who Cares? ... Who Pays?
Title is the foundation of property ownership â€” your legal right to possess and use your property. As a Buyer you want the assurance that the title to the property you are acquiring is "clear". You don't want a previous owner to show up and claim ownership of "Your" house.
Two types of Title Insurance:
Owner's Policy: to protect YOU as the new owner from financial loss in the event of problems from title defects. In Brevard County the seller usually pays for this insurance policy for a buyer. Can be negotiable.
Lender's Policy: to protect the Lender â€” insuring that the lender has a valid, enforceable lien on the property in the event of title disputes. The cost of this "simultaneous issue" policy is charged to the buyer at closing.
How it works: in condensed terms....
Title Companies or Attorneys research the history of the property in public records to confirm the seller's right to sell the property and any encumbrances that may exist against the property. The Title Company then issues an INSURANCE policy to protect the new owner against any hidden defects, unrecorded liens, fraud etc that could harm the new owner's legal right to the property.
Even the most diligent examination of the history of a property may not reveal all things. Issues may arise from fraud, mental incompetence, prior existing marriage claims, mistakes in recording legal documents, undisclosed divorces, forgeries... the list goes on. Any of these circumstances might be impossible to discover in a title search and exam. In the event that someone from the past shows up and is successful in proving a claim and ownership of the property, the new owner's investment in the property is protected via the title insurance policy.
Be sure to Rely on the Experts: Like STATE TITLE, SUPREME TITLE
Ask questions! Make sure you understand your level of protection and level of risk. Rely on experienced Title Agents to walk you through the closing process and explain any of these issues.
WATERMAN REAL ESTATE TEAM