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Why Every Home Buyer Needs Title Insurance


Posted: August 09, 2017 at 12:00 AM by Anna Jotham

Real estate agents often become the go-to person for buyers’ questions—especially first-time buyers and people relocating to the area. What do you think I should offer? Which lender do you recommend? How quickly can I close?

 

Oftentimes, however, home buyers don’t think to ask about title insurance. They don’t think about all the potential issues that may botch their purchase. That’s why it’s up to agents to advise their clients on title insurance and highly encourage it in virtually all home-buying transactions. Here’s why: for most buyers it protects their largest single investment.

 

Title insurance, for sure, can be difficult to explain to clients as it’s so different from other types of insurance. After all, most insurance covers things that may happen in the future, but title insurance covers you for things that may have happened in the past. But it’s a critical component in the home buying process, especially since buyers have only one chance to get it: at closing.

 

While title insurance covers home buyers should anyone discover a mistake in public records, forged or fabricated documents or unknown heirs claiming ownership that could question or remove their right to the property, much of the value happens even before the insurance purchase. That’s why it’s important to begin the title insurance process right away after an offer is accepted.

 

Once you engage a title company, they will begin the title search process. It’s during escrow that they can discover any issues or pending claims to the property, including deeds, trusts, judgments, easements, liens, even hunting rights. Knowledge of any of those items may change a buyer’s mind about the deal or the offer price; it may also give the seller a chance to clear up any outstanding claims. Because, let’s face it, no one likes expensive surprises when it comes to buying a home.

 

Another way to look at it; the lender, with already millions in assets, is putting as much money at stake as the buyer. If they’re buying it to protect their investment, shouldn’t the buyer do the same?



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