Among all of the other documents and coverages that must be completed when you purchase a home, be sure not to overlook title insurance. This type of insurance coverage can safeguard you should you find yourself having to defend your ownership of the property which can incur considerable legal fees. Here are some of the most common times when having title insurance could save you from stress and financial damage.
What Title Insurance Actually Does
Title insurance is a type of coverage that is specifically made to protect the owner of a home or property. It is used to fight against any claims that the owner (you) is not entitled to own the property, or if there is a problem that makes the owner responsible for something that they were not aware of before they completed the purchase. The types of protection offered will depend on the policy, but in general, they will include the following:
If An Unknown Heir Or Inheritor Appears
One of the ways that a new owner can come into possession of a property is if they are an heir or someone who is set to inherit that property. However, sometimes, when the time comes for the heir or inheritor to claim the property, they cannot be located. In this situation, the home would be made available for sale to the public. If this potential heir or inheritor later appears and makes a claim to the home, you, as the new homeowner, could be required to surrender the property to them without a title insurance policy to protect you.
If The Paperwork Has Been Forged
The deed to a home is a piece of paper and as with any other document, it can be forged or tampered with at any point. For example, someone may forge title papers to indicate that they are the true owners of a home and thus have a right to sell it. Often, this sort of scam happens when someone who is not the actual owner wants to make money by selling the property. If you purchase a home that is sold by someone without the rights to do so, then you did not legally buy the home from the owner and therefore, you do not own it either. Title insurance can help you resolve this situation.
If Liens Have Gone Unreported
One of the most common types of protection that title insurance offers is against undisclosed liens. A lien is a judgment against a property for debt. One example is if a previous property owner had work done to the home and did not pay the contractor, the contractor may have filed a lien against the home to recover that money upon the sale of the home.
Another example would be a loan that any previous owner took out that used the property for collateral and was not paid. If this paperwork is overlooked and then later discovered, you as the owner would be responsible for paying that lien off even if you had no part in creating the debt.
If Documents Have Been Improperly Executed
Many types of documentation errors can lead to confusion or dispute about who owns a property outright. This need not be malicious in nature, as in the case of forgery. Instead, simple processing and data entry errors can also cause issues that could threaten your ownership of the property.
Since title documentation goes through so many hands—the seller, the buyer, the real estate agents (if any), the county clerk and more—it is possible that the documents will be executed improperly or mistakenly changed or indexed. Title insurance can help you to protect your purchase if one of these mistakes ends up being costly or threatens your rightful ownership of the new property that you purchased.
These represent just a few of the types of protections that title insurance can offer. If you are interested in other safety features such as coverage against zoning and border disputes and more, an expert can help you put together a blend of coverage that is right for your situation and goals.
Trust The Title Experts To Help You Protect Your Investment
Whether this is your first property purchase or you are a veteran of the real estate market, do not neglect a robust title insurance policy to help protect your investment. The experts at Mathis Title Company would be happy to help you choose coverage that suits your needs and budget. Contact Mathis Title Company to learn more about our services or to get started on a policy for your goals.