Benefits of Getting Title Insurance When Purchasing Real Estate

People invest in real estate in several ways, and title insurance is a blessing in disguise for real estate investors. They can either buy a new commercial building or home. If you’re considering going down the same pathway, there are high chances you’ve done your homework. One of the most essential parts of protecting your real estate investment is insurance. Title insurance is a popular option for all real estate investors.

Like all other kinds of insurance, this one protects your investment, too. If a problem arises with your investment, the title insurance policy you’ve chosen will protect the money you invested. If there are any issues or errors, you won’t lose the funds you invested.

It offers many benefits to investors, and in this article, Robert DeFalco Realty is taking you through the most prominent ones.

Understanding Title Insurance

A lender or a buyer can have legal protection against ownership issues with a title insurance policy. The property’s title is a right of ownership that every person has on their property, and it is usually transferred from a certain party to another in the property’s deed. A mortgage buyer or lender will obtain this insurance in their home’s sale to protect themselves from financial losses. Be it prior affairs or property’s legal ownership, title insurance can protect you from a plethora of issues.

These issues can also include the property’s taxes, easements, ownership disputes, and the liens on a property. Usually, the buyer or the their bank purchases the title insurance for protection. The also also usually conducts a thorough search of all titles before they agree to purchase a certain property.

Often, a title insurance representative can also get involved, and they can oversee the development of the settlement. In some cases (in New York, for instance), a real estate attorney is in charge rather than the title insurance company.

The Different Types of Title Insurance

There are two main kinds of policies:

  1. Owner’s insurance
  2. Lender’s insurance

These provide varying financial protection to the buyer and the lender in real estate transactions. Here’s a brief overview of these policies:

Owner’s Insurance

With this policy, the buyer can protect themselves from financial losses about a title dispute that started before they occupied or bought a house. This insurance is usually sought after by the buyer or the seller. Its price is typically tied to the price of the home.

Lender’s Insurance

The lender’s policy, sometimes called the loan policy, protects lenders from title disputes. These arise after the purchase of real estate. Before acquiring a loan, a homebuyer is often supposed to purchase title insurance to protect the lender if things go south. The cost of a lender policy is tied to the amount a financial institution is loaning to the buyer.

Like all other insurance policies, title insurance has several benefits that protect different parties from various problems.

The Advantages of Title Insurance

Peace of Mind

A house is a big expense. Shouldn’t every buyer go to all extents to protect their investment? One of the prominent benefits of title insurance is the peace of mind you get after you’re a property owner. Why would you forego title insurance if you aren’t thinking of skimping your homeowner’s insurance policy?

The title of your property represents ownership. When you own its title, you own the property.

Future-Proofing for Unforeseen Events

While you may think you can predict all problems that your property will have to face in the future, preparing for the unthinkable can be tough. Like all other kinds of insurance, it’s something you should have. The most prominent issue that can arise with your property is the authenticity of its title. If the property is old and has changed hands over a long time, title insurance can be a borderline necessity.

If you’ve bought an old property, ensure you get the title insured. Here are some common problems you may face with your property’s title. These problems are often unpredictable, and solving them isn’t typically easy (if a solution exists, that is):

  • There’s a mistake in public records which prevents you from buying a property
  • Survey or boundary disagreements
  • A forged signature that negates the purchase or the sale
  • A missing heir appears out of the blue to claim their ownership of the property
  • Hidden liens or unknown charges on the property’s owner

Even though these are some common problems, these aren’t the only ones you should expect.

It Can Be a Requirement for Borrowing

In some states (like North Carolina), title insurance is required if you’re taking a mortgage loan. If you don’t have one, you won’t qualify for a loan.

You Get to Know About Past Owners

Shouldn’t the house’s owner know the entire history of their house? When you opt for a title insurance policy, the insurance agency will thoroughly study your property’s title. This can uncover some potential problems, unknown liens, or other issues that you may face with your property’s title. A property’s title search is a surefire way of knowing if your property is clean and whether your purchase is a good decision.

How Robert DeFalco Realty Can Help You

Having title insurance is a surefire way of protecting your property from potential issues that can come up. While you may not know about these problems beforehand, they can illegitimate your purchase, creating some serious complications for you. Luckily for you, Robert DeFalco Realty is ahead of the curve. Apart from helping you find stellar homes that fit your budget, we can also help you connect with title insurance agencies that ensure your purchase is legitimate.

This is also why several people have trusted us with this process in the past. Visit our offices in New York, or call us at 718-987-9700 to start your journey with us.