Title Company - Do You Need The Insurance?
If you're getting ready to buy a house, you've probably heard people bring
up the concept of a title company and the practice of getting title insurance when you make your purchase. What is this and what does it mean? Is it necessary? These are some of the questions potential home buyers often ask before going through with the transaction, and they are important considerations. To understand the policies regarding home deeds, you have to understand the mystery that often surrounds home ownership at its most basic level. Here's a look at some of the factors that affect ownership and your need for this insurance.Property Search
There will probably come a day when it will be very easy for even the most uninformed layman to conduct a thorough property search and determine the true owner of a piece of property. Certainly, these searches are usually easier today than they were even twenty years ago, with many counties having moved their records into the computer. Still, it is easy to miss or misinterpret important information. Early transfers and divisions of land make property ownership a murky topic in some instances. You don't want to buy a house without knowing that you own it outright. A title company can make sure this doesn't happen.
Additional Factors
Land divisions and zoning discrepancies are far from the only factors that can cloud the issue of ownership. When a title company looks into the history of a house, they want to find a clear chain from owner to owner. This allows them to easily insure the deed and set the buyer's mind at ease. But there are other things that can make determining this chain difficult, including divorce settlements, deaths, inheritances, and even liens placed on the property by lenders and the government. When these things are present, it can take some work to establish the chain of ownership.
Policy Options
Often, a title company will offer several policy options to a homebuyer. You can choose among them based on what you can afford, what you feel you need, and how confident you feel that you won't be challenged on your ownership status. Most companies will give you a basic policy, which gives you protection on the deed as well as protection against forgery, bad records, and encumbrances. Extended coverage may be available for more money, protecting you against permit violations, covenant violations, living trusts, and more. It is recommended by most real estate experts that a homebuyer purchase at least a basic policy.
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