During the purchase process, it is possible for unexpected problems to arise regarding the title on a property. Title insurance protects homeowners from these problems by offering legal representation and monetary assistance in the event that new information comes to light affecting ownership of the property in question. Possible title issues that could come up after a sale on a property has been closed include deed errors, undisclosed heirs, and forgery. The validity of a property’s title might also be put in question by building permit violations, building encroachments, surveying issues, and any zoning or subdivision violations.
The Title Search
Most real estate authorities recommend title insurance because home buyers can never be absolutely sure that the seller enjoys total and unhindered ownership of a home. Even if title insurance is purchased, a title search will generally be conducted to uncover any issues before closing. A title professional performs this search by examining public records. Over a third of the time, a title problem is found during this search that must be resolved before the sale of the property can reach closing.
How Does Title Insurance Work?
Usually, title insurance is purchased as a one-time fee that is paid by the buyer at closing. This fee will usually equal about $3.65 for every $1,000 of the home’s sale price. Once the title insurance is purchased, the buyer of the home is protected as long as he or she owns the property. Also, the eventual heirs of the purchaser of the property should also be protected. This means that buying title insurance will provide indefinite protection to a home buyer and his or her family.
The Two Types of Title Insurance
Title insurance is offered in the form of either owner’s title insurance or lenders title insurance. Those who purchase a property with financing should know that their lender will usually have a loan policy that protects the lender against any financial loss that might arise from a title dispute. Home buyers will have to gradually pay off this loan policy as they pay off their mortgage loan.
While title insurance is definitely an asset in a property purchase, it should not cause a home buyer to overlook the importance of a thorough title search. Title issues can be cumbersome and detract from a homeowner’s ability to enjoy his or her property, so take care to learn everything you can about a property’s title before closing.
If you’re interested in buying a new home in the Colorado Springs area and want to know more about whether title insurance is appropriate you, contact Park Avenue Properties of Colorado Springs. Our team is ready to answer any questions you may have and to help you get into your next dream home. Start searching for homes today!