Purchasing real estate could be a significant investment. However, seeking the right property could be an arduous task. Researching a property and doing due diligence before proceeding with the transaction takes a lot of work.
Also, real estate could be pricey, risking considerable amounts of money. Property owners could face countless paperwork and procedures even after transferring ownership. Unfortunately, titles could have defects, issues or disputes years after the purchase. These legal problems could be unknown to the property’s seller or left unrecorded, making them untraceable in title searches. Owners cannot remove these risks but could gain protection by obtaining title insurance.
It could secure property owners by covering damages caused by undetected title problems that arise after the purchase. These issues could include claims and disputes from ownership history discrepancies, defects, oversight, fraud, forgery or recording mistakes. All these matters could lead to litigation and accompanying legal costs.
Title insurance could protect policyholders by covering the lender’s interest or the property’s original sales price up to a certain amount if the owner faces a claim. The terms of a title insurance policy could vary. Still, it gives property owners long-term coverage that could help when encountering title issues or disputes.
Limitations of title insurance
This insurance could help property owners shoulder financial and legal burdens due to title problems. It could also remain active even after fully paying the mortgage loan. However, it might not cover specific title incidents based on the circumstances. Typically, title insurance does not cover title issues caused by the owner. It might also be irrelevant to eminent domain incidents.
Still, it could help avoid extensive costs due to title problems. Aside from securing owners and lenders, it could also protect their peace of mind when purchasing a property.