Buying a home is a large investment and can be intimidating. To have confidence in your purchase, it’s critical to get an owner’s title insurance. Below are eight common questions homebuyers have during the process.
What is title?
- Title is your right to own or use your property. Title also establishes any limitations on those rights. For a visual explanation, click HERE.
What is a title search?
- A title search is an early step in the homebuying process to uncover issues that could limit your rights to the property. If a title issue is discovered, most often your title professional will take care of it without you even knowing. After the title search is complete, the title company can provide a title insurance policy.
What is title insurance?
- There are two different types of title insurance: an owner’s policy and a lender’s policy. If you’re buying a home, title insurance, or owner’s title insurance/owner’s title policy, is a policy that protects your investment and property rights.
What’s the difference between an Owner’s Title Policy and Lender’s Policy?
- Usually a lender’s policy is required by the chosen lender and only protects the lender’s financial interests. The buyer typically pays for this policy, but that varies depending on the area.
- An owner’s policy is the best way to protect your rights as the property owner. This is usually handled as an “optional” policy, but…….
Who pays for title?
- Either the buyer or seller may pay for an owner’s policy. It’s best to ask your real estate and title professional on how it’s handled in your area.
Why should I purchase owner’s title insurance?
- Owner’s title insurance protects your investment in your property from certain future legal claims regarding ownership of your property. For a one-time fee, you and your heirs* receive coverage for as long as you own your home. The owner’s policy also covers potential legal fees and court costs for settling claims covered by your policy.
What does owner’s title insurance cover?
- Sometimes undiscoverable defects can come up after the title search. Under an owner’s title insurance policy, you are protected against certain undiscovered errors in the title.
- Title issues include unknown:
- Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
- Pending legal action against the property that could affect you
- Unknown heir of a previous owner who is claiming ownership of the property
- Unforeseeable title claims include:
- Forgery: making a false document
- For example, the seller misrepresents the identity of the person who sold the property.
- Fraud: deception to achieve unfair gain
- For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.
- Clerical error: inconsistent paperwork and historical records
- For example, an unforeseeable discrepancy in the property or fence line can cause confusion in ownership rights.
- Forgery: making a false document
How long am I covered?
The great news is your owner’s insurance policy lasts for as long as you or your heirs* own your property. Your life will change over time, but your peace of mind never will.
Want more information?
Tampa Bay Title helps homebuyers like you understand the importance of title insurance, so you can protect your property rights. You can click here to watch informational videos with helpful information on the homebuying process, or feel free to reach out to our team by clicking HERE. We’re happy to help!