What is Title Insurance and why to you need it? Today, Deborah Elliott-Shultz welcomes Bill McAfee of Empire Title onto the City of CS Show to discuss how Title insurance exists to protect the buyer and the lending institution from liens, judgments, and fraud. For example, the seller happened to not pay taxes, the IRS could put a lien on the property then come back and foreclose on the property…even if you’ve already purchased it. Or the previous owner had a fight with one of the neighbors and it went to court where a judgment was made against the previous owner and it wasn’t disclosed when you bought the property from this person. Also, a mechanics lien can be attached to a property up to four months after the work was completed but is retroactive to the time the work was completed. All of this affects your property because liens and judgments of these sorts are attached to the property of a person at the time they are issued.
This is why Title Insurance is so important. When issuing the insurance, the title company checks for liens and pulls the information from a specific source. They also post information to the source.
Both the buyer and the seller have the option to pay for title insurance. There are typically two policies issued, one for the buyer and one for the lender. The policy for the lender only lasts as long as the loan and only on what is outstanding on the balance. The policy for the buyer lasts as long as they own the property. If there’s a second mortgage on the home, then there are four title insurance policies.
DORA (Department of Regulatory Agencies) oversees the costs title insurance companies charge, and those companies must justify everything they charge. This means most of the costs of title insurance will be about the same. While the insurance companies are regulated, buyers are not, which means that you don’t have to purchase title insurance.
Come listen as Deborah and Bill explain the many ways Title Insurance can benefit you. While it may be one of those optional things with buying a house, it’s a very important way to protect one of the largest investments you will every purchase. If you have any questions, the team at Empire Title would be happy to answer your questions. You can reach them at (719) 884-5300, or visit their website at etcos.com. As always, if you have any questions about today’s topic or anything real estate, Deborah can be reached at (719) 641-1357.
And remember, it’s never too late to become the person you were meant to be.