What Does My Title Insurance Cover? Should I Get This Insurance, title insurance policy that’s what we’re talking about today?
- What Does Title Insurance Cover? Title Insurance Policy
- Title Insurance Protects From Past Events
- So I bet you’re wondering who pays for?
- One-Time Fee, Paid Through The Closing Costs
- Why It’s Important To Have Title Insurance
- Example of Where Title Insurance Paid Off For A Seller
- Unrecorded Liens & Easements
- Forged Transferred Ownership
What Does Title Insurance Cover? Title Insurance Policy
So what does title insurance cover, title insurance policy?
If you’re getting ready to sell a house or you’re in the middle of selling a house you may be curious about it.
- What does title insurance cover?
- Who pays for it?
- Why is it necessary?
Here in San Diego selling a house is one of the biggest financial things you will do.
And it’s important that you are protected with title insurance.
“My purpose for my clients is to lead guide and protect you through the entire process”
And part of that is for you to know that title insurance protects you as the seller and it also protects the buyer’s lender.
And because this is one of the biggest financial transactions that you’re going to do you want to be protected.
Title insurance protects you from any kind of loss or damage due to liens, encumbrances, easements, as well as defects in the title.
Title Insurance Protects From Past Events
And unlike typical insurance, you know the insurance that we all have on our homes to protect us from future events.
Title insurance protects from past events.
So I bet you’re wondering who pays for?
It now you pay for the title insurance because you’re guaranteeing a clean title to the buyer and their lender.
One-Time Fee, Paid Through The Closing Costs
And the buyer pays because their lender requires it and the title insurance fee is a one-time fee and it is paid through the closing costs.
Why It’s Important To Have Title Insurance
Now it’s important you know that the county recording office does not guarantee their record-keeping and that’s why it’s important to have title insurance.
Example of Where Title Insurance Paid Off For A Seller
So here’s an example of where title insurance really paid off for a seller.
“My client tom was selling Nancy his mother’s home. She had passed away and he was appointed as the executor of her state”
Now the entire transaction went well we had title insurance everything went along according to plan, the property was sold.
And then about 90 days later I receive an email from my escrow company.
They said that they had been contacted by a lienholder on the property.
As it turned out it was a $20,000 lien that Nancy Tom’s mother had taken out years ago to do some improvements in her home.
Now for whatever reason, that lien was not properly recorded.
But when the buyer went to sell the property they found out that there was this lien.
So the title company stepped up did what they had to do and they paid that $20,000 lien.
Because they had insured clear title to that buyer.
This house was a fixer property and that’s why it was selling so quickly 90 days after Tom had sold it.
Now, this is an unusual circumstance but it does happen from time to time.
What’s Most Important
And what’s most important that the lien was settled it was paid by the title company with no drama for Tom and the estate.
And it potentially saved Tom and the estate thousands of dollars in legal fees and the $20,000.
Unrecorded Liens & Easements
Title insurance protects you from previously unrecorded liens as in Tom’s case on the property and also easements on the property.
Forged Transferred Ownership
Forged transferred ownership rights on the property, unintentional errors in recording, and filing of the documents.
And any other title defects prior to the current owners’ recording of the property.
So the final thing that I imagine you’re wondering, is what does it really cost?
Well on a $600,000 property here in San Diego County, you would expect to pay approximately $700 in title fees.
And the title fee is based on the sales price of the property.
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