As a Realtor, I often get asked about the importance of title insurance. While it may not be the most glamorous part of buying a home, in our opinion it's essential for protecting your investment. When a property changes hands, mistakes and irregularities—sometimes dating back years—can arise, potentially putting your ownership at risk.
Imagine this scenario:
You’ve found your dream home and are ready to make the purchase. But what if the seller:
- Used the property as collateral for an unpaid loan and didn’t disclose it?
- Fraudulently claimed to be the sole owner?
- Failed to pay real estate taxes?
Even simple errors, like mistakes in legal documents or the reappearance of undisclosed heirs, can jeopardize your ownership.
Here are just some of the hidden title risks that wouldn't be revealed by even the most meticulous title search but are covered by an owner’s policy of title insurance:
- Forgery: Protects against falsified documents.
- Fraud in the Execution of Documents: Shields you from fraudulent paperwork.
- Undue Influence on a Grantor of a Deed: Covers coercion or pressure on the previous owner to sign over the property.
- False Impersonation: Guards against someone falsely claiming to be the property owner.
- Errors in Surveys: Corrects inaccuracies in property boundaries.
- Undisclosed Missing Heirs: Protects against heirs that come forward after the sale.
- Wills Not Properly Probated: Covers improper handling of wills.
- Misinterpretation of Wills and Trusts: Shields you from incorrect interpretations.
- Mental Incompetence of a Grantor: Protects if a previous owner was mentally incompetent when signing documents.
- Transfer of Title by a Minor: Covers sales involving minors who legally can’t sell property.
- Heirs Born After the Execution of a Will: Protects against claims by heirs born after the will was made.
- Incorrect Legal Descriptions: Corrects mistakes in property descriptions.
- Non-Delivery of Deeds: Covers issues where deeds were not properly delivered.
- Unsatisfied Claims Not Shown on Record: Protects against undisclosed claims.
- Deeds Executed Under Expired or False Powers of Attorney: Guards against improperly authorized sales.
- Confusion Due to Similar or Identical Names: Protects against mix-ups with people having similar names.
- Dower or Courtesy Rights of Spouses: Covers rights of spouses from previous owners.
- Incorrect Indexing of Land Records: Protects against clerical errors in public records.
- Clerical Errors in Recording Legal Documents: Shields you from mistakes in document recording.
- Delivery of Deeds After the Death of the Grantor: Covers deeds that were delivered posthumously.
Title insurance might seem like just another expense in the homebuying process, but it’s a small price to pay for peace of mind. It ensures that your ownership is secure and free from the potential pitfalls that could arise from past discrepancies. Without it, you could face significant legal and financial challenges down the road.
When you’re ready to buy a home, let’s talk about how title insurance can safeguard your investment and provide you with the assurance that your new home is truly yours.
