When you purchase a home you want to make sure that the people you’re buying it from have the full and legal title. As a buyer, you want a free and clean title of any loans, fees and liens that the previous owner had against it. Problems with the title can limit your enjoyment and use of the property and may bring you big financial loss down the line. This is where title search and title insurance plays a role.
A title search is when a title professional search public records to look for any problems with the home’s title, looking at deeds, trusts, and wills, tracing the history of the property back many years. Some buyers have lost their houses because of clouded ownership. One way of avoiding this is to buy title insurance, also known as an owner’s policy. This is a one-time upfront investment with rates based on the purchase price of your home. This policy is used to protect the purchaser’s interest in the property. Though this policy is not required, it is highly recommended. This policy is valid as long as the owners, or their heirs, have an interest in the property. When selling, this provides assurance to the buyer that the title company will back you up with legal defense if needed and will also monetarily cover title after purchasing a home.
As always, it is wise to consult with your Realtor, lender and Title Company to know your options and to determine what’s right for you.