Three Common Title Defects and How Title Insurance Saves You

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Any real estate agent will tell you that buying a home is not the cut-and-dry experience that you might have when buying a car or other big ticket item. There is a lot of paperwork that goes into buying a home. Among the expenses you will experience during the purchasing process are appraisals, home inspections, and title insurance. Title insurance is necessary because sometimes issues do arise with titles that can prevent or delay a sale. Here are some common title defects and how title insurance helps save you.

Co-Owners

Sometimes the deed may not accurately reflect all of the owners of a property. If a property has shared ownership with a spouse, sibling, parent, or other person or entity, that owner needs to sign off on the sale as well. If they don’t and they come back later and stake a claim to the property, you could lose your home. Title insurance will protect you by repaying you for the money you have lost from losing the property and may also cover some moving expenses.

Debt Liens

It happens on occasion that people have a lien against their property due to a debt that they owe. This sometimes happens when hospitals sue for medical bills. Liens can come from other sources, as well. Liens must be satisfied before a property is able to be sold. If a lien is not discovered until after the property is purchased, title insurance may pay the lien amount so that the sale can be valid.

Tax Liens

Property taxes must be paid annually. It is generally recommended that you pay your property taxes throughout the year so that you don’t have to worry about a big bill in December. Yet it is easy to get behind on property taxes when you have other things going on in your life. Tax liens are usually discovered during the title search, but it does occasionally happen that they are not discovered until after the sale. If there is a tax debt against the property discovered after you purchase it, you will be responsible for paying those back taxes. But if you have title insurance, it may pay those taxes for you.

If you are buying a home in the near future, you will need to make sure that you have adequate title insurance to protect both you and your lender. Contact us today for more information or to get started.