Understanding Title Insurance

Understanding Title Insurance
Title to​ a​ property is​ a​ record detailing the​ owners of​ the​ property and rights associated with the​ ownership .​
Title typically shows a​ progression of​ ownership from the​ first owner to​ the​ current one .​
Title is​ a​ fairly simple concept,​ but when it​ goes wrong it​ is​ a​ nightmare .​
That is​ where title insurance comes in.
Title Insurance
Title insurance guarantees that the​ title on​ a​ property is​ marketable when you​ purchase the​ home,​ condo,​ land,​ etc .​
You should always pay for title insurance .​
It typically costs a​ few hundred dollars and will save you​ a​ bundle if​ problems arise.
When you​ buy title insurance,​ a​ title insurance company researches the​ title for the​ property .​
The insurance company will look to​ see if​ the​ title is​ clear .​
Clear simply means that the​ seller is​ truly transferring title to​ you​ and no other person can claim ownership .​
While this sounds fairly simple,​ rest assured that title problems arise all of​ the​ time.
Title Problems
You might be wondering how you​ could possibly have title problems .​
Here are a​ few examples:
1 .​
Divorcing Couples – Divorce is​ unpleasant and sometime very ugly .​
In particularly nasty situations,​ one spouse may attempt to​ sell a​ home without telling the​ other .​
To gain clear title,​ you​ need both spouses to​ sign off on​ the​ sale .​
If you​ don’t,​ you​ are going to​ become a​ party of​ the​ divorce proceedings .​
Now,​ wouldn’t that be fun?
2 .​
Estate Sales – If you​ are purchasing a​ house as​ part of​ an​ estate sale,​ there can be real problems .​
The heirs may not be getting along and in​ an​ effort to​ get what’s mine,​ may try to​ sell the​ residence without including all the​ heirs in​ the​ transaction .​
If you​ buy this home,​ you​ could end up involved in​ a​ lawsuit filed by an​ heir left out of​ the​ transaction.
3 .​
Ingress and Egress Issues – Title to​ a​ property can have technical issues related to​ egress and ingress .​
Occasionally,​ one finds title to​ a​ property that is​ so messed up that the​ owner doesn’t have the​ right to​ enter or​ leave the​ land because to​ do so would require crossing another person’s property .​
In short,​ the​ property is​ landlocked and something must be worked out with the​ neighbors .​
Typically,​ a​ solution comes in​ the​ form of​ hard,​ cold cash…lots of​ it.
These are just a​ few issues that can arise with title .​
With real estate,​ unique issues can arise all the​ time.
If you​ buy title insurance,​ you​ don’t have to​ worry about problems with title .​
If a​ problem arises,​ you​ calmly pick up the​ phone and call the​ title insurance company .​
The insurance company will come up with a​ solution,​ even if​ it​ means paying you​ for bad title.

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