hat is title insurance A careful title search is done at
and why should any buyer the time property changes hands.
get it when purchasing a On rare occasions mistakes are
home (single family, townhouse, made anyway. Property can change
condo, apartment, or whatever hands in a number of ways
format your home purchase takes)? including by deed, by will and by
Doesn't the attorney or court action. Typically, these
settlement company handling the proceedings are recorded in
closing see to it that you have a different places. Searching the
clear title? Isn't this just history of ownership to be sure
another way for someone to siphon nothing has fallen through the
a few coins off a real estate cracks is a tedious job that
transaction? requires alertness, intelligence,
and skill. Mistakes can happen.
Title Insurance Fortunately they don't occur very
often, but they do happen.
Title insurance prevents the
property owner from suffering A mistake of this kind happened a
financial loss if, at any time few years ago to some elderly
during his ownership of the friends of mine who owned a 136
property, someone comes along who acre parcel of farmland in
can show that they have full, or Stafford County, Virginia. It had
partial, ownership of the been the home place, the family
property instead. Every mortgage farm. The family had 10 children
lender I'm aware of requires who inherited it on the death of
title insurance be purchased to their parents. After they became
cover the amount of the mortgage. adults, one child, a daughter,
They're not in business to lose bought out the interests of each
money. of her siblings. At her death,
the property was conveyed by will
to her three sons. One of her
sons had died without a will Actually, this happened not once,
which resulted in his widow and but twice with the same family
their 3 children gaining group. In one case, the aunt
ownership of his one third remembered that her parent had
interest per state law. been bought out and signed the
quit claim deed. In the other
My friend is the widow. She and case, a cousin either did not
her brothers-in-law wanted to know or refused to acknowledge
sell the property. The area had what had happened and ended up
begun to develop and each of the getting ten per cent of the
three of them had significant proceeds.
health problems, so they decided
an influx of cash would be My suggestion is that you
welcome. The property was master purchase title insurance because
planned, but not yet zoned, for lack of it could prove
multi-family use. Being subject devastating. You make a down
to a rezoning complicated the payment. You make monthly
sale, but the price reflected the payments, an increasing portion
change in use. When the title of which is reducing the amount
work was done, it was discovered of principal owed. It is very
that the heir of one of the 10 likely that the value of your
children was still shown as a ten property will go up over the
percent owner of the property. years. As time passes, these
Neither my friend nor her elements are likely to result in
brothers-in-law had title your home equity's being your
insurance. If the heir would not largest asset. Just how
sign a "quit claim deed," they devastating would it be if you
were stuck with an additional eventually discovered that
owner. someone else owned what you'd
always thought was your home? of 10 lots at a time, so it's
possible a bank has an interest
Do yourself a favor. When you buy in your title. What happens if
a home, buy title insurance. the bank goes bankrupt and you're
left trying to get a release from
What if the home you're a trustee in bankruptcy?
purchasing is new? No one else
could have owned it before you, Honestly, I'm not making this
right? Well, someone owned the stuff up. I've seen this kind of
land. As a matter of fact, the thing happen. Do yourself a
builder/developer probably had a favor. Buy title insurance.
construction loan on it, and
they're often released in groups
About the Author:
Raynor James is with http://www.fsboamerica.org - providing homes for sale by owner, "FSBO", properties. Are you thinking, "Should I sell my home?" Visit http://www.fsboamerica.org/seller.cfm to sell your home sale for free for one month.
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