Buying or selling a home is a complex process, and most people who have never gone through it are unfamiliar with all of the aspects of the sale. One of the things that you may need to have is title insurance. Title insurance protects buyers and lenders, but it is purchased by either buyers or sellers. In some cases, title insurance policies will be purchased by both the seller and the buyer. Here’s what you need to know about title insurance and when to get it.
What is Title Insurance
Title insurance is a layer of protection for buyers and lenders. In order for a property to be legally sold, it must have a clear title. A title search is done in every real estate transaction to ensure there are no liens or tax levies on the property. However, a title search doesn’t always turn up everything on a property. Title insurance protects the buyer and lender in the event that defects in the title arise after closing.
Why Sellers Need Title Insurance
Title insurance is not a legal requirement, but most buyers will require that you purchase title insurance. When you have title insurance as a seller, it protects you in the event that someone with interest or liens on the property arise after closing. For example, if a tax levy is discovered after closing, title insurance protects the buyer from having to pay the taxes or lose the property. Most buyers, especially those represented by a real estate agent, will require the seller to purchase title insurance.
Why Buyers Need Title Insurance
The title insurance that buyers purchase is actually protecting the lender. The lender’s policy protects the lender from losses in the event that someone else with claim to the title shows up and causes a problem. Lenders want to know that they are being protected from losses, and as such they almost always require title insurance.
If you are in need of title insurance or title search to buy or sell your property, contact us today for more information or to get started.