No matter who you are or what your interest is in property, when it’s time for you to make a real estate transaction, title insurance benefits you. So whether you are a seller, buyer or lender, title insurance will offer peace of mind and help ease the transaction, making it an essential part of the real estate transaction lifecycle. Here’s how title insurance helps everyone at the table.
The Buyer
When you’re the buyer in a real estate transaction, you want to make sure there are no problems related to property ownership and that all liens taken against the property in the past have been satisfied. Horror stories about unsuspecting buyers getting a raw deal abound. Check out this real-life story from The Washington Post, in which a buyer thought they had completed the deal, only to find out later they’d been tricked. Title Insurance protects the buyer from any messy title transfer issues, such as easements, outstanding financial obligations against the property, forgery, fraud and more.
The Lender
Title insurance protects the lender from issuing a loan for a property that the owner doesn’t have the free and clear right to sell. No lender would want to approve a loan for a property if the owner can’t legally transfer ownership to a buyer, for whatever reason. Most mortgage loans in the U.S. are issued by people acting in a fiduciary capacity, lending other people’s money, such as banks, savings and loans and life insurance companies. The bottom line is they need to protect that investment. Title insurance protects the lender from title problems, which in turn protects their investment.
The Seller
It is in the property seller’s best interest to make sure they have a clear title, and title insurance helps make sure that title is marketable when it’s time to sell. Some sellers may unknowingly try to sell a property they don’t have the full rights to. For example, a seller who co-purchased a home with a sibling may try to sell the property themselves if they were estranged. The same holds true for potentially confusing ownership transfers in cases of divorce or inheritance, or liens filed against the property for debts like taxes, child support and more. When you purchase title insurance, research of public records is thoroughly conducted to protect everyone’s interest. For the seller, that means a clean sale and no sweating the details.
A safe and efficient title transfer is in everyone’s best interest, so when it comes time to make a real estate transaction, title insurance is truly a team player.