Owner’s Title Insurance? What?

Owner’s Title Insurance? What?

You have signed a contract offer and are ready to get moving towards closing. So much paperwork, so many fees, realtors, mortgage lenders, title companies – you can’t keep it all straight, not to mention what? Title Insurance? You don’t even know what title insurance is let alone if you need it!

Let’s get started!

tug of warBefore you get to the closing table a title search is completed. There are two goals to doing a title search:

First, we want to make sure that the chain of title makes sense. We want to see that “A” sold the property to “B”, who sold it to “C”, who sold it to “D”, etc., right up to the person who is going to sell it to you.

Of course, it’s often not that simple. If “B” died, we will need to make sure that the estate was probated and all the heirs are accounted for. If “C” put the property in a trust, we will need to make sure that the proper Trustee signed off in accordance with the terms of the Trust. Divorces, bankruptcies, Quit Claim Deeds, and deaths can all create problems.

Secondly, we want to make sure about the encumbrances on the property – some encumbrances are expected. Utility companies have easements to run their lines. A subdivision might have reasonable restrictions in place. There might be an Order of Taking from when the Town laid out the street. There’s nothing wrong with any of these.

Then, there are liens that encumber the property. The word lien tends to scare people, but every mortgage that’s ever been placed on the property is a lien. Taxes are sometimes liens, but are not due and payable till a later date. There can be other liens, too . . . judgments, financing statements, code enforcements, etc.

So you ask – What is title insurance?

In a nutshell, title insurance protects the insured (you) if anything is wrong with the title search or that the title search didn’t show.

In my mind, the best part of title insurance is that if you do have a problem, it becomes someone else’s problem (the title company’s) to fix it!

There’s a good chance that you won’t find out about a title problem until you are getting ready to sell. Discovering a title defect can set off a chain reaction that ruins multiple closings and has everyone scrambling. The results can be disastrous.

An owner’s title insurance policy can save your closing because title companies are often willing to continue to insure the title for the new owner or offer affirmative coverage depending on the specific situation.

Really? What are the chances of something like that really happening?

chances of happeningRemember, the nature of any kind of insurance is that you’re betting you’re going to need it and the insurance company is betting that you’re not.

There’s a good chance you will never need it. However, it’s still worth having. Is your homeowner’s insurance a waste every year you don’t have a fire? Is your life insurance a waste every year you don’t die??

Unlike other types of insurance, an Owner’s Policy is a one-time premium. It will protect you as long as you own the property and will protect your heirs if they inherit it from you.

Another thing to consider — having an Owner’s Policy entitles you to discounts on future Lender’s Policies. As a general rule, if you refinance twice, you’ll save more than the premium cost in the first place!

Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties. Employees of Title Junction can also act as a witness in courtesy closings as well as an escrow agent or a notary public.

Please contact Jennifer Ferri of Title Junction, LLC for further information @ 239-415-6574 or www.title-junction.com.

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Posted on December 12, 2014, in Title and tagged , , , , , , , , . Bookmark the permalink. Leave a comment.

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