What Should You Know About Title Insurance?
Closing day on a house is a stack of papers just waiting to be signed. One of the forms that needs a signature is a title insurance policy. This is the kind of insurance which protects both the buyer and seller from what happened in the past.
The house in question may be several decades old. It is quite possible that there were a number of owners of the house prior to the seller taking possession. What neither party may know is there may be an obligation from the past which has not yet been met. The policy coverage protects the buyer from any risk involved in a prior claim dispute.
Some of these claims may come from estates, documents which were authorized by an expired power of attorney, any mistakes that were the result of mistakes in the tax record, a divorce had not been fully completed, or outright fraud and misrepresentation.
The buyer may take ownership of the property only to discover that there is a claim on the territory made by someone else. It can result in some legal problems and possibly the need to pay an earlier claimant what is due this person. This is a primary reason why title insurance is so important.
What the title insurance company will do is check through the historical record of the house. This search can go back to the day when the house was originally constructed. Title insurance staff will look for any possible lien or claim which still exists.
Usually there is nothing to worry about. Past owners have gone through the title search themselves and old claims may have already been settled. Still, there may be some difficulty that has to be corrected.
The seller might not even know there is a lien on property. It may have been the result of an unpaid bill or some other expense. It can happen that the seller either forgot or did not notice a statement in the mail indicating a lien placed on the property. Whatever the reason, it is possible this claim will stop the transaction dead in its tracks. If that happens, the seller may want to take care of the prior claim immediately.
Title insurance is a cost that is the responsibility ordinarily of the seller. The new neighbors may be wonderful, but neighbor encroachment will happen and the title insurance helps protect against that.
Even something as simple as a mistake in a map is covered by the insurance policy. One nice thing about the policy is that it is a one-time only payment. The property is then covered until it is sold once again.
There is also a lender’s policy which is for the institution which holds the mortgage. This protects the lender in the event of any title problems.
With all of this being said, there is a great deal of benefit to the title insurance for both parties. The seller is able to offer up his or her property in good faith.
There is nothing holding back the transaction, and everything can be finalized on closing. The title insurance companies inspection of the records and is any anxiety about the past.
The buyer also benefits enormously. There are no hidden surprises and the property belongs completely to him or her.
The premium is paid by the seller.
What is essential for both parties is that on the day of closing there is no evidence of a prior c laim on the property. With that, the final touches of the closing transaction can be conducted.
The title insurance policy is just one of the documents that needs to be looked at and signed on that close. Nevertheless, it is extremely important and provides superior protection.
Visit our website for more information on title insurance and real estate for sale in Westerville Ohio.