Securing the Right Real Estate Title Insurance upon Closing
Title insurance has become an accepted part of real estate transactions, giving lenders some security in regard to claims against a particular property that they may be insuring. A title insurance company offers the security, and your realtor may have a favorite entity that she or he tries to steer you towards during your real estate transaction.
However, as with most aspects of the real estate process, you must choose a title insurance company and it would certainly behoove you to investigate all the possible options. Of course, there is certainly value in going with a title insurance company that your realtor has a familiarity with, but simple familiarity does not always make for the best business decision. Here are some things to think about when going through the process of selecting a title insurer.
This Does Not Apply To You
On a personal level as the owner of a piece of real estate, title insurance does nothing to protect you. Title insurance protects your lender from claims against a property, but not the owner. For that kind of protection, a separate type of insurance called an owner’s policy can be taken out to protect you from similar claims. If claims do arise, they are not usually small, so owner’s policies can certainly come in handy.
The Grass Is Always a Different Color
While the grass may not always be greener when you investigate a number of title insurance companies, it is certainly a different color. Each title insurance company has its own unique ways of covering certain things, omitting certain things, and generally constructing a policy unique to that organization. Shop around for your needs and get full disclosures from each title insurance company of what is and what is not covered.
If you are a new home buyer, sometimes builders can make claims against the title of a home. Find out if that kind of activity is covered under the policies you investigate. Your situation is unique and will always have special circumstances that may not universally apply to all title insurance offers. Consult your Realtor and read through the coverage declarations of the title insurance company you consider to ensure that you are as covered as you need to be.
Read the Report
During the course of the title insurance process, the title insurance company you eventually choose for your real estate transaction will send a report to the lending company on your deal with any points of interest or dispute concerning the property’s title. This can be an interesting read and you may be able to point out mistakes or issues with it as well. Make sure that both your lender and title insurance company have an accurate view of the property, as it will greatly affect you should a claim come against the property’s title standing.
Title insurance can sometimes seem like an arduous part of the real estate process, but making sure that you are properly covered in any business transaction is simply a smart thing to do. Those that have had title claims come against their properties will tell you that process is not enjoyable and that the right kind of title insurance can greatly reduce your exposure to that event. As always, you are paying your Realtor for a reason and one of them is expert advice on the twists and turns of your transaction.
Title insurance is one of those twists and turns, so be sure to use your Realtor as a resource when going through the process. Ultimately, the control you exercise over the title insurance process will depend on how involved you want to be in your real estate transaction. There is always value in taking charge of your own significant investment in a piece of real estate, so don’t be shy.