Why you need Title Insurance now more than ever

Lately we have been inundated with reports of real estate foreclosure auctions, short sales, distressed property and seized property sales.  If you are contemplating purchasing real estate through one of these means you should consider the many pitfalls that you may encounter.  Of utmost importance is that you secure a clear title to the property that you are purchasing.  In order to accomplish this, it is necessary to purchase title insurance.  There are two types of title insurance, Owners coverage, and Lenders protection. 

Owner's title insurance ordinarily is issued in the amount of the real estate purchase and lasts as long as the insured have an interest in the property concerned.  Lenders title insurance decreases and eventually disappears as the mortgage is paid off.  Lenders require mortgagee title insurance as security for their investment in real estate, just as they will insist on hazard insurance and other types of coverage as investor protection. 

An important part of title insurance is its emphasis on risk elimination before issuing a policy. This means that you, the insured have the best possible chance for avoiding title claim and loss. Title insuring begins with a title company doing a complete search of public land records for matters affecting the title of the property being insured. 

A common term used in the real estate business is "cloud on the title".  Some examples of clouds that can be of concern are:  Outstanding mortgages, judgments, and tax liens.  Also easements on the property that have not been recorded can create problems. 

However even the most careful preventive work may not locate all hidden clouds on the title.  As the name implies title insurance offers financial protection against hidden hazards.  With title insurance, a home buyer can enjoy protection against future claim and loss. 

We have several title companies in Northern Arizona; most are members of the American Land Title Association.  Make sure you are fully protected; insist on a title insurance policy from one of these companies when you buy real estate regardless of who the seller may be.