Ever wondered what title insurance is, or why it's important?

Title insurance is a form of insurance that protects both the buyer of a property and that buyer's lender. There are two types of title insurance: the lender’s policy and the homeowner’s policy. Perhaps you already know this. But the question is, what exactly does this mean? What does it protect against, exactly?

Sounds like another junk fee, huh?

It's not.

Title insurance one of the best things you can do to protect your biggest purchase: your home.

Title insurance, simply put, is a form of Indemnity Insurance that protects lenders and homebuyers from financial loss sustained by defects in title to a property.

Okay, basically: want to make sure the house you're buying doesn't have any surprises, like back taxes, unpaid liens or a lawsuit you don't know about?

Title insurance discovers that on your behalf.

Do you know the people selling the house actually own it or are who they say they are?

Title insurance discovers that on your behalf.

How do you know the right kind of deed will be recorded with the right county?

Title insurance covers that on your behalf.

And if it turns out after closing, such things are discovered, title insurance protects you by compensating you financially for your loss. 

Title Insurance is also required if you are purchasing a home using a mortgage of any kind.

Title Insurance Story Time

Example: say you bought a beautiful home in Renaissance, one of the most prestigious neighborhoods in all of Winter Haven, Florida. Sellers seem nice enough, and after all, they live in a beautiful, lakefront mansion. "We're moving out of state," they explain, "and want to close in two weeks."  A few months later, there is a knock at the door and you find a bewildered looking couple staring at you. "What are you doing in our house," they query, with a look of concerned perplexion. "Oh, you must be mistaken," you say. "I bought this house six months ago from a lovely couple who lived here". "No," they reply, nearly apopoleptic. "This is OUR house...it's OUR HOUSE! We leased it to a "lovely couple" when we went away to Hawaii for the Summer and they sold it out from under us!" 


This is a problem. A big problem. What to do?

The title policy kicked in and compensated the new buyers their purchase price so they were able to find a new home, and the property was returned to it's rightful owners.

This is an actual case that happened in the early 1990's.

The tenants never had clear title in the first place. They falsified documents, listed the house on the MLS, sold it, took all the proceeds and split. However, they (or, more accurately, their unsuspecting realtor) made sure they closed at a title company--who issued a title insurance policy. While it was an awful situation, both buyer and rightful owners were protected financially from what could have been a nightmare. 

But wait...it gets better! Title companies tabluate ALL the expenses involved in closing: all taxes, closing costs, earnest money deposits, escrows, commissions, etc. so that buyer and seller know how much to bring and/or receive. The also make sure the deed is properly recorded with the county in your name. 

They do all this for a fee, of course, but it's very affordable.

Could you do all of this yourself?

I mean, you could. You could DIY your own surgery, if you really wanted to. But if you mess it up, it's going to be extremely painful, expensive and embarrassing.

Just because you could doesn't mean you should.

Title companies do this all day, every day. This is best left to the professionals.

Too much can go too wrong too fast. If there's an issue later, the court system is unlikely to look favorably upon you for eschewing the reasonable title fees and doing it yourself.

If you're thinking about buying or selling your home, ask your real estate broker which title company they recommend. Many title companies are delighted to explain the process to you and are here to help. If you ever want to start the conversation, you know who to ask.

 Give us a call at 863-333-5053 today!