By Kathy Henne
Contributing columnist
When you purchase your next home and receive your deed, how can you be sure you are receiving a clear title? Do you really need a title search? What’s title insurance?
When purchasing real estate, the highest and best deed available is a General Warranty deed. However, if you are purchasing property from a lender who has taken the property back in a foreclosure sale or if you’re purchasing a property from an estate you may be unable to get a General Warranty deed.
For assurance, you should always have a title search of the property performed by a Title Company. They will search back forty years in the county records. This search determines the history of the title to the property, and identifies any judgments, liens, or claims by others that may be an impediment to a good title. If any are discovered, they must be eliminated prior to passing of the title to the buyers.
One additional step insures that the buyers are receiving a good title is title insurance. Title insurance pays legal costs associated with defending the title should a claim occur later. In the event that a title defect is established, the insurance will pay up to the face value of the policy which is usually an amount equal to the purchase price. If you are getting a loan to purchase the property, the lender almost always requires you to purchase a title insurance policy to cover their interest in the loan. This lender’s title insurance policy only covers the lender, not you.
Since it’s so important to your lender that they are covered, it’s probably a good idea to purchase title insurance to protect yourself, also. This is called owner’s title insurance and can be purchased at any time from a title company. If you purchase the owner’s title insurance policy at closing or within 30 days of closing, you usually get a discount on the price.
When purchasing your next home, ask for an owner’s title insurance policy. It’s cost is usually less than the price of a few hours of your attorney’s time and it provides great peace of mind.
Contact the Kathy Henne Team Re/MAX by calling 937-778-3961
