Title Co. closings
It’s the night before you meet to close escrow and you’re getting ready to have sweet dreams of your success. As you drift off to sleep you see your beautiful new property and all its potential when suddenly a stranger walks off with your investment! Don’t worry it’s just a dream. But it can happen, unless you have Title Insurance.
Title insurance is provided by your local closing agent (either a Title Company or a Real Estate Attorney depending on your State or Province) to protect you from the possibility of running into some “cloudy” issues concerning your property.
There has been some debate as to whether or not Title insurance is necessary. Simply put, there are many valid reasons for protecting your stake in a property with title insurance. Primarily to protect against “clouds” on a title. Clouds are losses that could occur if you discover after closing that someone else can claim ownership of your property. Clouds can come in many forms. Unrecorded liens and easements, mining claims and water rights, and right of parties in possession of the property.
The only way to protect against clouds is to have title insurance put into place following a thorough search of all public records on your property. This is done by a title examiner. The title examiner will view all public records that involve your property including deeds, wills, and trusts to make sure the title has passed correctly to each new owner. The examiner will verify that all prior mortgages, judgments, and other liens have been paid in full.
Lisa (grc1984@yahoo.com)
If a cloud is found, the “cloud” will be located and served official documents that entail their claim to the property. This should all be taken care of before you close. It also gives you the chance to opt out should a major cloud be found on your property’s record.
Keep in mind, like with other types of insurance, title insurance can have many exemptions such as environmental protection laws and boundary disputes. It is important to make sure that you have complete title insurance coverage. Also, be sure to ask about inflation riders for your policy as this will increase the coverage amount as the property’s value increases.
Unlike other types of insurance, title insurance is a relatively inexpensive item. Typically, you can expect to pay 0.5% of the purchase price which is usually added to the closing costs. A bit more for full coverage. This can seem high considering the price of the houses these days, but it is a drop in the bucket compared to the possibility of loosing your entire investment of time and money. With title insurance you’ll sleep a little better knowing you have protection if your dream takes a turn for the worse.
