How Title Insurance Can Protect Your Real Estate Investment

Title insurance is a must for any real estate investment. It protects your investment from things like title defects and errors. Without title insurance, you could be facing expensive legal fees if something goes wrong with your property.

Title insurance can also help you sell your property more quickly and at a higher price. And, as an added bonus, it’s typically tax-deductible. So, make sure to include title insurance when you’re planning your next real estate investment.

What Is Title Insurance And What Does It Cover

Title insurance is a type of insurance that protects the owner of a property from financial losses that may arise from disputes over the ownership of the property. The policy is issued by an insurance company and is valid for the life of the property.

Title insurance covers the costs of legal fees and other expenses related to defending the title to a property in court. It also covers the cost of any judgments or settlement awards against the owner of the property.

In most cases, title insurance also covers the cost of any losses that result from forgery or fraudulent transfer of ownership of the property.

The Benefits Of Having Title Insurance 

Title insurance protects homebuyers from financial loss in the event that the title to their property is defective.

Without title insurance, a homebuyer could be forced to pay for costly repairs or legal fees if it is discovered that the property they purchased has unpaid liens or encumbrances.

In addition, title insurance provides peace of mind by ensuring that the homebuyer will not be held responsible for any hidden defects in the property title.

For these reasons, it is highly recommended that all homebuyers purchase title insurance when purchasing a property.

How To Get Title Insurance

When you purchase a home, you want to be sure that you are getting the property free and clear of any liens or other claims. Title insurance protects you from financial losses due to undetected title defects. Here is how to get started:

First, you will need to order a title search from a land title office or a qualified abstractor. This will help to identify any potential claims or encumbrances on the property.

Once the search is complete, you will then need to obtain a title insurance policy from a title insurance company. The premium for the policy will be based on the value of the property, and it is important to shop around for the best rate.

Finally, be sure to keep your policy up to date by regularly renewing it and keeping track of any changes to the property.

What To Do If You Have A Claim

If you think you may have a title insurance claim, the first thing you should do is contact your title insurance company. You will need to provide them with some basic information, including your policy number, a description of the problem, and your contact information.

Once the Title Insurance company has this information, they will open an investigation and determine whether or not there is a valid claim. If they determine that there is a valid claim, they will take steps to resolve the issue and compensate you for any damages.

If you have a title insurance policy, it is important to familiarize yourself with the claims process so that you can be prepared in the event that you need to file a claim.

FAQs about Title Insurance 

What is Title?

A title insurance policy provides protection against various types of defects that may exist in a property’s ownership. 

What is Title Search?

A title search examines a property’s historical records in detail. Among these records are deeds, court records, property and name indexes, and many others. This search is intended to verify the seller’s right to transfer ownership, as well as discover any claims, defects, or other interests or burdens on the property.

What is a Title Defect?

It is possible to buy or sell a property with a title defect, which is also known as an unmarketable title or a clouded title. Having a title defect means that it is difficult or impossible to verify the owner of a property, which negates their right to sell the property. 

Is it Necessary to Purchase Owner’s Title Insurance?

An owner’s title insurance policy protects you from future legal claims regarding ownership of or liens on your property. For a one-time fee, you and your heirs* will be covered for as long as you own your home. Legal fees and court costs for settling claims covered by your policy are also covered by your owner’s policy.

Are There any Problems That a Title Search can Reveal?

A title search can show a number of title defects and liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against the seller and restrictions limiting the use of the land.

What Does Owner’s Title Insurance Cover?

A title search may uncover undiscoverable defects. You are covered against certain undiscovered title errors under an owner’s title insurance policy. 

Unknown Title Issues:

• The seller has not paid his taxes, or there is an outstanding mortgage or judgment against the property
• Legal action pending against the property that could affect you
• The property is being claimed by an unknown heir of a previous owner

Unexpected Title Claims:

• Forgery or making a false document
• Fraud or deception to achieve unfair gain
• Clerical error or inconsistent paperwork and historical records

How Long Am I Covered?

Unless otherwise stated, your owner’s insurance policy lasts for as long as you or your heirs own the property. 

Is It Possible For Me To Choose Where I Buy Title Insurance?

You may choose the title insurer you feel most comfortable with even if your lender (or even your realtor or attorney) recommends one. Insurers are chosen by the buyer, not the lender or seller.

Glossary of Real Estate Terms

In the real estate industry, there are a lot of terms that might not be familiar to those outside of the business. Here is a quick glossary of some common terms you might come across:

• Appraisal: An estimate of the value of a property, typically conducted by a certified appraiser.
• Assessor: A government official who determines the value of a property for tax purposes.
• Broker: A real estate professional who represents buyers or sellers in transactions.
• Closing: The final step in a real estate transaction, during which the sale is legally finalized and the deed is transferred.
• Contingency: A condition that must be met in order for a real estate transaction to go through. For example, a loan contingency typically requires that the buyer obtain financing before the sale can be completed.
• Depreciation: A decrease in value due to wear and tear or obsolescence.
• Due diligence: The investigation that a buyer does on a property before making an offer, typically including things like a home inspection and title search.
• Foreclosure: A legal process whereby a lender takes ownership of a property after the borrower has defaulted on their loan payments.
• HUD-1 statement: A form issued at closing that itemizes all of the charges paid by the buyer and seller in a real estate transaction.
• Lien: A legal claim against a piece of property, typically arising from unpaid debts.
• Realtor: A professional who is a member of the National Association of Realtors, and who abides by its code of ethics.
• Zoning: The regulations governing how land can be used in a given area. For example, residential zoning typically doesn’t allow for businesses to operate out of homes.

Title Insurance in Clallam County

Title insurance is a vital part of the home buying process. It protects you from any potential title issues that may arise with the property. The benefits of having title insurance far outweigh the cost, so it is important to get coverage as soon as you purchase a home.

If you have any questions about getting or using your title insurance policy in Clallam County, please contact us today. We would be happy to help you get started on protecting your investment.