When you purchase a home, your title represents the extent of your legal ownership of the property. However, even when everything appears to be perfectly fine with a real estate title, there could be an unseen defect. Some title issues can result in complicated and expensive legal disputes. Therefore, it’s essential to do what you can to resolve title discrepancies before they become an issue. One way to protect yourself and your property in this situation is by purchasing title insurance. If you are an Arizona homeowner, you will want to know: Do I need title protection for my Arizona property?
What Is Title Insurance?
Title insurance is a type of insurance policy that indemnifies property owners and lenders against financial or property loss stemming from defects or ?clouds? on a property?s title. The title insurance company is responsible for researching the property’s history and identifying any potential issues. These may include matters such as title forgeries, property damage, liens, errors in the title records, and competing ownership claims. Owners can purchase title insurance to protect their homes or other real estate. Lenders buy policies to safeguard their interests in property.
When you find the perfect home, you will want to ensure that the property is free and clear of any liens or encumbrances that will interfere with your rights before closing. Title insurance companies search public records to determine a property’s legal ownership history. Your title insurance agent’s job is to take you through the purchasing process and notify you of any issues with the title. If the title is determined to be clear, you can go forward with buying your property.
Reasons to Have Title Insurance
The title insurance company is expected to do its job before closing and make sure everything is okay with your title. That being said, even the most careful homebuyer can encounter unforeseen issues. The title insurance policy is there to indemnify you for specific title problems that could arise after closing.
By investing in title insurance, the homeowner gets the benefit of being defended against competing ownership claims. If an adverse ownership claim arises, your title insurance policy will help protect your superior right to the property. Further, if there are problems with fraud or the title not being clear, the title insurance company will assist with the issue. Additionally, title insurance policies can help homeowners avoid protracted title claim disputes. When an insurer is involved, matters can often be resolved more expeditiously without burdening the policyholder.
Unlike homeowner’s insurance, these policies are not ongoing. The policyholder pays the company one time and benefits from the coverage for years. The policies cost approximately 0.5% to 1% of the purchase price of the property. The price you pay for title insurance is well worth being secure in knowing that your home is free from encumbrances and that you will have the support and protection you need if any arise.
Laura B. Bramnick is an Arizona real estate attorney with the knowledge and experience you need to protect your interests during every stage of your real estate matter. If you are seeking an exceptional, client-driven real estate lawyer in Scottsdale, Phoenix, Sedona, and throughout the State of Arizona, contact Laura B. Bramnick to schedule your consultation.