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Property Title Insurance

Property title insurance is primarily a US phenomenon, but it is used in some other countries. In the broadest terms, it protects the buyer of a property from finding out that there are liens or other issues with the property that could affect their legitimate ownership of that property. For instance, property title insurance would pay the owner if it turned out that there was a lien on the property that affected their ownership and that was not known prior to purchase. This type of insurance is necessary in most US real estate transactions where a bank is involved.

Property title insurance will usually be a part of the sales package that you get when you work with a realtor. Most often, they’ll handle it for you and it’s a standard part of what they do. If you’re dealing with a private seller, however, and there are no real estate agents involved, you’ll want to make sure that you get this form of insurance to protect yourself. It ensures that you’re not left in a bad spot if the owner proves to be something less than honest with you about the state of their property and their finances.

When you purchase property title insurance, the company that issues it will do the heavy lifting as far as finding out about liens and other issues. This is a great way to make sure that this work is done correctly. The records that the property title insurance companies scour are public and you can do this work yourself. However, real estate is complex and, because of the large amount of money that is almost always involved in these transactions, it’s a good idea to get the title insurer to take care of the work.

If it turns out that there is a lien on the property, your property title insurance will pay to make sure that you’re ownership is guaranteed. This rarely happens. Most often, the companies that issue property title insurance are experienced enough—and exposed to enough risk—that they do a very good job of taking care of any such issues. The problems sometimes arise when people go for “handshake” deals and when they fail to perform the required work to find out whether or not the property is able to be sold outright. This can cause serious issues for homeowners and the few dollars saved on property title insurance are not worth the hassles that may arise.

Property title insurance exists because, quite simply, not all people are on the up and up when it comes to making financial transactions. If they’re selling off a property that wasn’t theirs—such as one that belonged to a deceased relative—they may not even know that there are liens or other issues with the property. Title insurance is a good way to make sure that these issues are dealt with by professionals. The fact that they have to pay for errors makes them very diligent.

Find out more about Property Title Search and read about Real Estate Title Search.

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