When purchasing a new home, you may think that title insurance isn’t necessary. After all, there is no title history, so there should be no title defects, right? It’s a logical conclusion, but the truth is far more complex.
Title Insurance: A Wise Investment
Title protection is important to protect your investment from some of the unique title issues that can affect both buyer and lender.
Title Insurance Can Prevent Unwelcome Surprises Associated with a New Home
When you buy a newly-constructed home, you may assume you are the first property owner. However, when it comes to the land itself, there may have been numerous property owners, and the parcel may be part of a larger plot of land. Title protection will dig up any liens that exist on the undeveloped land you hope to purchase. In addition, a land survey will define the property boundaries for you, so there are no surprises. It’s a concern particularly in a new subdivision, so there are no disputes about where the properties are subdivided.
A title search may uncover other unwelcome findings. For example, according to “Why do I need title insurance for a newly built home?” on www.firstam.com, a title search could find that a builder didn’t pay vendors or subcontractors, which could result in a lien on your property.
Another example, detailed in, “Why You Need Title Insurance for Your New Home,” On https://www.newhomesource.com, looks at a housing development in Fairfax County, Virginia in the early 2000s. Some homes that had been approved actually exceeded height limitations set by the county government. Years later, when the government decided to enforce the limits, owners had to either lower their grading or lower their roof—a huge headache. Title insurance helped by covering the associated expenses.
In addition, in cases where multiple family members own a plot of land, there is a risk the property is being sold to a builder without everyone’s signoff. If an owner says they didn’t know about the property sale, it could lead to a messy battle for a new owner who thought the property title was clear.
A One-Time Investment, a Lifetime of Peace of Mind
Title issues can arise around many issues, and these are just a few examples of what can happen when you purchase new construction. The one-time investment in title insurance can grant you the peace of mind you want in knowing that you are free to enjoy your new purchase in the way you intended.
Selecting a Title Insurance Company You Trust is Your Right
Remember, whether you are buying new construction or a home with a long history, an important part of the title insurance process is selecting a title insurance company you know and trust. It’s your right to select the team of professionals you know will have your best interests in mind, so you can focus on other important aspects of your life.