Buying a new home is scary, beautiful, and overwhelming all at the same time. Anything that you can do to have peace of mind is essential. You know that you need certain documents for closing; two forms of identification including a driver’s license, and the funds to close out the loan. But what about title insurance? You want to be guaranteed that the title has no incumbrances or anything that would cause problems. The answer to this dilemma is a search and a title guarantee or title insurance.
Buyers sometimes ask if the charges for title insurance is really needed. After all, the problems that title insurance protects you against should be all in the past. The answer is “yes.” Title insurance or a title guarantee is a particular form of insurance, and it defends you against possession claims that might come up in the future. A one-time premium paid at closing provides protection to you and your heirs for as long as you own the property.
Title guarantee or title insurance is a policy issued by an insurance company, and this company guarantees that the title to the property is clear of any claims, liens or encumbrances. It proves to you and the mortgage company that the seller has the right to sell the property to you.
Title insurance can cover problems that did not show up during the title search or may have been missed due to errors in public records. Title search companies search for the property’s title history and defects like quitclaims or other claims that may affect the value of the property. Title insurance does not cover structural problems you find in the purchased property, but it does reassure you that the seller is legitimate. Title insurance is generally a one-time fee and is part of the closing costs. The buyer makes payment unless you have negotiated with the seller for them to pay for this type of insurance.
Unlike other types of insurance, title insurance protects you from events that may have happened in the past. You never know, but a forgery, forgotten heirs or any other claims by people who think they have a right to your new property could cause problems.
A title search may uncover many defects in the title. However, title searches usually only discover events and documents that are public record. Anything that is done under the table or illegally or without proper documentation could pop up years down the road.
Unfortunately, title searches are prone to human error or elimination. Title guarantee in Utah will be done to the best of their ability, and if there was a clerical error in recording or some other problem, a guarantee title company in Utah will find it.
Title guarantee in Utah is done by a title company who does a thorough search and examination of all recorded documents. They do this search to determine who currently owns the property, if it has been properly deeded, and if there are there other parties with interest in your property. One example could be a lien holder or others who might have an easement over your property.
The title guarantee lists requirements that you must be to be able to fix or cover in the title before closing. Once the closing is finished the title company records the documents and issues the title policy. Keep this policy a safe place in case problems crop up.
Nearly all lenders insist on having a title guarantee or title insurance. This document is vital for other parties in the investment of your property and even more critical for the new buyer to be protected for the full value of the home.
According to the American Land Title Association, 36% of all real estate transactions have problems in the title. Title insurance protects you, the buyer against damages if any future claims might come up. There are many ways your property title can be compromised. You may not lose your property altogether because of these problems, but some title defects can make it impossible for you to sell or give away your property in a will.
Defects that a title search will uncover, and title insurance will protect you against are:
Forged deeds, will or releases,
False impressions of who owns the property,
A document executed using invalid power of attorney,
Misinterpretation of a will or discovery of a will at a later date,
Deeds by minors or someone of unsound mind or married person representing s single,
Mistakes in recording,
Liens for unpaid taxes,
Misapplied tax payments,
Heirs who surface years later,
Forgeries, missing heirs, and conflicting wills are the most common problems.
Yes, title insurance is necessary and whatever you pay for it at closing is well worth the cost.