Forgoing title insurance can lead to issues down the road. Here’s why.
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How Title Insurance Helps Buyers and Sellers
I’m joined today by Rod Gordy of Fidelity National Title, who will be giving us a brief explanation of how title insurance helps buyers and sellers alike.
Title insurance protects against financial loss from defects in the title to a property. There are a few different types of title insurance, but the most common is lender’s insurance.
How Does Title Insurance Work?
Lender’s insurance is usually purchased by the buyer to protect the lender in the case of issues with the title of the property. I’ll explain that in a minute.
Owner’s insurance is purchased by the buyer or the seller to protect the actual owner of the property against such occurrences.
So, What Issues Could Happen with the Title?
There are a number of problems that could arise with the title of a home. It could be something as simple as incorrect signatures on documents, something a little more complex, like unresolved building code violations or incorrect surveys, or even disputes of ownership by another party.
Title insurance will protect the lender or the owner (depending on the type of insurance) in case of any of these situations.
Other Benefits of Title Insurance
Buyers get title insurance so that when they get a new loan, the lender is insured in the proper position on the home.
Sellers need title insurance so that when the new buyer takes ownership of a home, there isn’t anything that will cause any problems in the title policy. For example, if you bought a home that recently had a new roof installed, and a month later, the roofer says you owe them for it, the title company would step up and pay it.
So, title insurance can be pretty far-reaching, making it that much more important.
I’d like to thank Rod for giving us a quick look at what title insurance is used for.