As the attorney was going over the settlement charges with the buyer in one of today’s closings, he came across the line item for title insurance. I asked him if he ever had anyone turn down the option for this coverage and the answer was yes. Can you say, “MISTAKE”?
Title insurance protects you against financial loss due to defects in title.
Unlike life, auto, health, or homeowners insurance; title insurance coverage ends on the day of issuance and extends backwards.
More than likely your property underwent many changes in ownership prior to you contracting to purchase. Title insurance ensures that should a dispute ever arise, your equity is protected. (e.g.: forged deeds, inadequate legal descriptions, improperly recorded legal documents, defective acknowledgements, ECT.)
Although your closing attorney will search your title before closing, (typically the search is 40 years for residential and 60 years for commercial) disputes can still arise. No search is altogether dependable. This is why lenders require a lender’s policy. They want their interest protected!
While the lender will require a policy to protect their interest, this does not protect your interest. You will need an owner’s policy to accomplish this.
Once you purchase your owner’s title insurance policy, your interest is protected indefinitely. There are no further premiums. If you decide to refinance at a later date, the lender will require a new lender’s policy be purchased. This is because their policy terminates once you pay off the old mortgage. The owner’s policy remains in place.
Title insurance is relatively inexpensive. Purchasing an owner’s title insurance policy is a wise decision and one that you will surely never regret. It is amazing how a few hundred dollars can save you hundreds of thousands.
Don’t risk financial loss. PROTECT YOURSELF!
In 2009 I was at a Realtor function at Travina’s in Lexington. I had just gotten licensed and was trying to learn as much as possible as quickly as possible. Anywho, an attractive older lady approached me, introduced herself and asked me how long I had been in business. I already knew what her reaction would be, since EVERYONE asked me if I was “ok” and didn’t I know I’d make more money being a real estate paralegal (the profession I had abandoned) . And, honey… do you know what the economy is doing? How was I to know what the economy was doing working for a closing attorney, then a foreclosure attorney, then a closing attorney again?? (insert sarcastic eye roll)
She indeed had the same reaction that most folks did, except this lady followed up with, “oh darling… you should have been a real estate agent when you were a paralegal. I made a KILLING and I didn’t even know what I was doing… I still don’t know what I was doing”. Then she laughed what was quite possibly the most evil laugh I think I’ve ever heard. I never, ever wanted to be that lady and for the life of me I don’t know why anyone would.
The point of this post is this: the market is hot right now….. HIDE YO’ WIFE, HIDE YO’ KIDS! No, seriously, please make sure you have adequate representation. Everyone is flocking to real estate school then popping up big, fancy signs… leading you to believe they actually know what they’re doing. The things I learned as a paralegal are not taught in real estate school. How to negotiate is not taught in real estate school. Marketing is not taught in real estate school. SO, so much more is not taught in real estate school. There are deadlines in contracts that you need to know about. If your agent doesn’t know, how will you? My job lately has been kind of nightmarish and many of my colleagues are feeling the pain. I feel horrible for the clients of these agents, but my job is to represent my client. Please do your homework. Real estate is an expensive buy. You owe it to yourself to have adequate representation. As for me, I’ll just stick around until the economy falls again (and it will) because that is when they all jump out. Fact. Rant over.