Title insurance is necessary to protect our real estate investment. However, there are instances that this is also the cause of the problem. So, in order to avoid problems concerning this insurance, it is wise to know its potential pitfalls.
Market Watch shares a possible solution in order to avoid potential pitfalls with title insurance companies. Before anything else, one should know the real reason why a real property is placed under a trust. This is for the benefit of passing the property to the designated beneficiaries without having to undergo the same time and expense of probate.
The transferring and holding of a property in a trust is a common practice among estate planners. It generally involves recording a new deed where the name on the title is changed. On the other hand, there are risks involved on the original purchase of the title insurance. One should check if the title insurance company is still in business. After that finding the title insurance policy issued at the time of original purchase is a must if a real estate property deeded to a revocable trust.
The importance of this is to compensate for the losses resulting from errors the title company has made during the time it researched the title in the first place. Examples are boundary dispute or easements and undiscovered liens. Make sure to ask the company to check the exact details of the coverage. Make sure to file the contract updates that are in writing and be sure also to make copies.
In the event that one would like to sell an inherited property and encounter any title problems, report it to the title company and they will have to fix it.
Daily Republic shares a few issues and probable concerns about title insurance. This is actually a smart way to protect a certain property or investment from legal claims concerning ownership of a certain property. Another benefit is that the premium is paid one time (typically it would cost around 0.5% of the purchase price) where the owner and his or her heirs receive coverage as long as they own the property.
Other than that it also covers potential court costs, legal fees, outstanding mortgages/judgments, pending legal actions, claims from an unknown heir of the previous owner, forgery or misrepresentation, fraud and clerical errors
There are two kinds of insurance which is the Owner's policy and the lender's policy. The former is the best way to protect ones property rights where the buyer or the seller will pay for this policy, while the latter protects the lender's financial interests. Only this time, based on geography, it is the buyer who pays for this policy
What do you think about having your property place under a title insurance company? Share your opinion in the comment box below.
