Real Estate

Title Insurance. What it is and why you NEED it.

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!

 

 

Real Estate

Rollback Taxes?

Reason #5,683 why you need an EXPERIENCED buyer’s agent!!!

When purchasing land that you will use as a residence from a larger tract of land and where the seller has been taking the agricultural tax break, the land being purchased will be subject to what is known as rollback taxes. This amount is up to five years of the difference between what the taxes would have been at the non agricultural rate and the amount of the agricultural rate. As you can imagine, this amount can be HUGE! Just like anything else in a real estate contract, this CAN be negotiated… that is, IF you know it exists. The land you thought was a such a good deal may not be once you are hit with the rollback taxes.