Before you close on the purchase of your home, you need to take out title insurance. Title insurance is designed to protect a purchaser in case the seller or any prior sellers did not have free and clear title to the real estate. If you do not take out this type of safeguard, you stand the chance of losing your property.
What the Protection Covers
In order to obtain title insurance protection, your closing agent will arrange for it soon after a purchase agreement is drawn up and signed. The policy serves to protect the insured against financial loss for any one of the following types of situations
- Misrepresentation by the seller as to his or her true identity (for example, he or she could be a renter posing as the owner)
- Forged documentation such as a will or deed
- Missing or undisclosed heirs
- Errors in the recording of legal paperwork
- Deeds conveyed by people who are mentally unsound
- Deeds transferred by minors
- Deeds that are transferred by sellers who state they are single when, in fact, they are married
- Fraudulent activities
- Liens on the estate
Why Title Insurance Is Necessary
As you can see, if you do not buy title insurance protection, you can leave your home susceptible to increased risk. For instance, if you buy your home from someone who represented himself or herself as the seller but was not actually the owner, you can easily lose your home. However, with title insurance in place, you can save on the costs of sizable legal fees and can better support your legal stance with respect to ownership.
When you make arrangements to buy title insurance protection, the title company will conduct a search to determine the exact owner of the property, check how the title is vested in the owner, and check to see if there are any liens affixed to the real estate. The search also identifies any encumbrances such as easements on the property.
Once the policy for the title insurance is executed, you are protected from risks that originated before the effective date of the policy. Find out more about taking out a title insurance policy by contacting the Prestige Title Insurance Agency in Adrian, Michigan. The company can be reached at 517-264-6040. You can connect with them on Facebook for more information!
