Unless you are a seasoned home buyer or real estate professional, chances are good you haven’t given much thought to title. While you may not know, or hear much about it, a clear title is as important to getting to the settlement table as securing a loan. When buying a home -whether it be an investment property, primary residence, or falls in the “other category” – you absolutely need to purchase a title insurance policy to ensure that your investment is free and clear of all defects, and to be certain the seller has the right to sell!
Buying a house is similar to marriage. Whether you are aware of it or ne you buy that home you take on all its old baggage. While you may not be able to completely vet and clear your spouse of every past discrepancy, your title company can make sure you home is exactly what you are expecting. Some things you may want to know about title insurance are:
- Unlike most insurance, title insurance is paid up front at the time of settlement and will be factored into your closing costs.
- Title insurance is paid only one time and is good for the entire time you own the home.
- There are different levels of title insurance. Be mindful that you are purchasing the full coverage policy. Many title companies will quote you a low estimate to win your business, but give subpar protection.
There is a good chance that if there are issues with the title you may be blissfully unaware. That said, most title issues can be cleared up with cooperation of the seller, and are taken care of behind the scenes. Some of the most common issues that arise during a title search include:
- Mechanic’s lien – this is a lien on a property placed by someone like a general contractor to ensure payment for work completed. This should be lifted upon payment in full, but can lead to delays if it wasn’t and the contractor is unreachable.
- Child support liens – also common and usually an easily remedied issue. A child support lien could have been placed years ago and paid, but not cleared or forgotten by a spouse.
- Missing heirs – It is common when a person dies that the estate is left to his or her heirs according to the will and/or deed of trust. Sometimes though, the whereabouts of these heirs can be unknown, or worse, there is a sibling battle to the right of the property.
- Unknown liens/bankruptcies – as I mentioned before, once you buy a home you are married to it. You take on the previous sellers discrepancies. Banks can place liens on your property for the sellers unpaid debts after you have closed.
This can all sound overwhelming, which is why you leave it to your trusted experts – so when you sign on the many many dotted lines you can breathe easy. If you have questions or would like to learn more about title please contact me Meighan Sweeney at MeighanMoves@gmail.com