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Why Do You Need Title Insurance?

Title Insurance.

It’s a term we hear and see frequently - we see reference to it in the Sunday real estate section, in advertisements and in conversations with real estate brokers. If you’ve purchased a home before, you’re probably familiar with the benefits and procedures of title insurance. But if this is your first home, you may wonder, “Why do I need another insurance policy? It’s just one more bill to pay.”

The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and your mortgage lender, want to make sure that the property is indeed yours - lock, stock and barrel - and that no individual or government entity has any right, lien, claim to your property.

Title insurance companies are in business to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly and that your interests as a homebuyer are protected to the maximum degree.

Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders and others who have an interest in a real estate transfer. Title companies routinely issue two types of policies - “owner’s”, which cover you, the homebuyer; and “lender’s”, which covers the bank, savings and loan or other lending institution over the life of the loan. Both are issued at the time of purchase for a modest, one-time premium.

Before issuing a policy, however, the title company performs an extensive search of relevant public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or more likely, information gathered, reorganized and indexed in the company’s title plant.

With such a thorough examination of records, any title problems usually can be found and cleared up prior to your purchase of the property. Once a title policy is issued, if for some reason any claim which is covered under your title policy is ever filed against your property, the title company will pay the legal fee involved in defense of your rights, as well as any covered loss arising from a valid claim. That protection, which is in effect as long as you or your heirs own the property, is yours for a one-time premium paid at the time of purchase.

The fact that title companies work to eliminate risks before they develop makes the title insurance decidedly different from other types of insurance you may have purchased. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen event, say a fire, theft or accident. The purpose of title insurance, on the other hand, is to eliminate risks and prevent losses caused by defects in title that happened in the past. Risks are examined and mitigated before property changes hands.

This risk elimination has benefits to both you, the homebuyer, and the title company: it minimizes the chances adverse claims might be raised, and by so doing reduces the number of claims that have to be defended or satisfied. This keeps costs down for the title company and your title premiums low.

Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.

Isn’t sleeping well at night, knowing your home is yours, reason enough for title insurance?

Article by CLTA

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Mountain Home, ID 83647
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"Highly recommend Melissa as a seller's agent! As long distance home owners with renters living in the house, we certainly didn't have the ideal situation for selling a home. She handled EVERYTHING to make the process as seamless as possible. We had great communication and she was willing to do whatever it took to get our home sold-- working with the renters, arranging repairs, etc. Melissa quickly sold a home we hadn't laid eyes on in 7 years. We couldn't be more pleased with our choice to hire Melissa as our agent." eschore5
Our family was growing but unfortunately our home wasn't. When my wife and I finally made the decision to sell and build a new home there were all lot of choices for our real estate needs. Some brokers wanted 5% and others 6% to sell our home. That to us seemed unreasonable. We worked hard to build up equity over time and didn't want to give nearly a third of it to a Realtor. I then got in contact with Susan Richelieu at Assist 2 Sell. Susan told us that she could sell our home at a significantly lesser rate and offer the same full service assistance as all other realtors in town. Hard to believe, right? To be completely honest, she was wrong, because she wasn't just as good as other realtors in town...SHE WAS BETTER!! Susan did an amazing job marketing our home and she even found the buyer. She did everything and stayed in constant communication with us so that we were never left in the dark. We had an accepted offer within 2 months! The best part is she saved us over $5000 in real estate fees. All of that money went back in our pocket and into our new home. Thank you Susan for representing my family. You truly are the best in the business. Matt and Michelle Chandler
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