When we in the real estate business talk about title, we are actually referring to three specific services that a title company performs in the course of a real estate transaction.

Title Search:  A title company will do a search to determine every person or institution who has a legal or financial claim to the property you are considering buying.  This is important to make sure all parties are on board with the sale and all appropriate payoffs are made at closing.

Title Insurance for the Seller:  The policy is paid for by the seller and insures that is a claim is made against your legal title of the home during the time you own it with regard to previous claims to the home, you are covered.  So for example if the previous owner discovers a long lost uncle who claims that they had a legal right to the home before the sale and has some rights to the home, the title policy will cover you and defend your right to the home in court.  The policy exists in case the title search failed to uncover someone or an institution with a claim to the home.

Title Insurance Policy for the Buyer:  You will pay for a policy as well.  It isn’t fair for the seller to pay for insurance for a claim that didn’t originate during the time after they owned the home.  So you will purchase title insurance for any future claim against your title to home.  So for example if you put up a fence and your neighbor claims that it is a foot onto their property, the title insurance will help defend your rights in court.

The goal of all activities a title company will perform is to protect the legal transfer and possession of title to the property.  The good news is that it is unavoidable but relatively cheap and if you ever have a claim against you, you will be glad it’s there.

Related Topic

What is Escrow?

Give me a call if you need help:

Rob Graham, Accredited Buyers Representative
Windermere Real Estate
206-321-6349
robgraham@windermere.com

Popularity: 1% [?]