Chances are that you have car insurance and health insurance, but has title insurance ever crossed your mind? If you are in the process of becoming a homeowner, obtaining title insurance is one of the many important responsibilities in your home buying process. Though the chances of ever utilizing your title insurance are low, it’s worth the investment simply for the money and hassle you will save yourself in an unexpected situation.
Understanding Title Insurance
When you buy a home, you actually buy the title to the property. This little piece of paper gives you the free right to occupy and use the space that you purchase. Without the title formally in your name and cleared from any complications, the home is not legally yours. Since titles are always at risk of being limited by the rights and claims of others, title insurance gives you protection against potential problems.
It’s a Simple Process
Buying title insurance isn’t a complicated process, and in fact it’s fairly automated once your purchase agreement is signed. Your closing agent will actually help you find your title insurer, and you’ll only need to spend a one time fee of about $1,000 to afford the insurance. If you’re lucky, you may live in one of the states that requires the seller to cover the cost of title insurance.
Protect Yourself From Complicated Situations
Though most titles can be purchased free and clear, there are also plenty of situations that prove titles can get complicated. In dramatic situations, a seller might try to sell a home he does not actually own, or a renter may try to post as an official seller. There are also many cases that don’t involve blatant crime but instead are rooted in confusion. For example, a seller might unknowingly need a distant relative or ex-spouse to also sign off on the sale of the home. Or perhaps an enormous judgement on the house must be paid before the title is clear. There are so many potential sneaky situations, and title insurance will help to identify, solve, and avoid them.