Title to a property is a record detailing the owners of the
property and rights associated with the ownership. Title
typically shows a progression of ownership from the first owner
to the current one. Title is a fairly simple concept, but when
it goes wrong it is a nightmare. That is where title insurance
comes in.
Title Insurance
Title insurance guarantees that the title on a property is
marketable when you purchase the home, condo, land, etc. You
should always pay for title insurance. It typically costs a few
hundred dollars and will save you a bundle if problems arise.
When you buy title insurance, a title insurance company
researches the title for the property. The insurance company
will look to see if the title is clear. "Clear" simply means
that the seller is truly transferring title to you and no other
person can claim ownership. While this sounds fairly simple,
rest assured that title problems arise all of the time.
Title Problems
You might be wondering how you could possibly have title
problems. Here are a few examples:
1. Divorcing Couples - Divorce is unpleasant and sometime very
ugly. In particularly nasty situations, one spouse may attempt
to sell a home without telling the other. To gain clear title,
you need both spouses to sign off on the sale. If you don't, you
are going to become a party of the divorce proceedings. Now,
wouldn't that be fun?
2. Estate Sales - If you are purchasing a house as part of an
estate sale, there can be real problems. The heirs may not be
getting along and in an effort to "get what's mine," may try to
sell the residence without including all the heirs in the
transaction. If you buy this home, you could end up involved in
a lawsuit filed by an heir left out of the transaction.
3. Ingress and Egress Issues - Title to a property can have
technical issues related to egress and ingress. Occasionally,
one finds title to a property that is so messed up that the
owner doesn't have the right to enter or leave the land because
to do so would require crossing another person's property. In
short, the property is landlocked and something must be worked
out with the neighbors. Typically, a solution comes in the form
of hard, cold cash...lots of it.
These are just a few issues that can arise with title. With real
estate, unique issues can arise all the time.
If you buy title insurance, you don't have to worry about
problems with title. If a problem arises, you calmly pick up the
phone and call the title insurance company. The insurance
company will come up with a solution, even if it means paying
you for bad title.
More Information:Visit
http://www.fsboamerica.org/ for more details.
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