Is title insurance really necessary? Is it a prerequisite or an additional expense when buying or selling a home? You may not give it much thought, but having title insurance has benefits not only for the seller but for everyone involved in the sale and purchase of a home. Because of this, we suggest you work with a seasoned title company like MacGregor Abstract to provide title insurance and help with your TP584 forms.
Benefits to the Seller
When a homeowner’s interest is covered by an owner’s title insurance policy, they get the certainty that the title will be transferable when the house is sold. The title insurance coverage protects the seller from financial loss if a prospective purchaser rejects the seller’s title. Title insurance will protect not only the insured owner but also that person’s heirs for as long as they own the property and even after they sell through warranty deeds. The title company will not only pay for any valid claim made against the insured’s title, but it will also pay for the costs and legal fees associated with defending against a title claim. No wonder getting title insurance is a crucial part of knowing how to sell your house.
Benefits to the Buyer
The buyer requires protection against significant financial loss as a result of a defect in the title to the property purchased. A buyer can get the protection of title insurance for a single, one-time premium that is tiny in comparison to the value of the property — a policy that is backed by the title company’s reserves and solvency. Title insurance will cover both claims stemming from title issues that could have been found in public records and those referred to as “non-record” defects that could not be found in public records, even after the most thorough search.
Benefits to the Lender
The vast majority of mortgages issued in the U.S. are made on behalf of depositors by savings and loan associations, savings banks, commercial banks, and policyholders by life insurance companies. These lenders must be worried about the safety of their mortgage investments because they are lending other people’s savings or policyholders’ funds. Title insurance offers a mortgage lender a high level of protection against loss of security due to a title defect, and this protection is in force for as long as the mortgage is not paid off.
Benefits to the Real Estate Attorney
Title insurance allows the real estate attorney to provide the client with significantly more security than the attorney’s opinion alone. The attorney’s opinion is strictly confined to matters that have been documented, and the client can only recover from the attorney if the attorney is proven to be negligent.
Benefits to the Realtor
Both the title company and the realtor want to make sure that as many purchases as possible are completed to the satisfaction of all parties involved. For the realtor, client satisfaction, improved reputation, and sustained business will result from the quick and secure transfer of title. Aside from the assurance that title insurance provides, most realtors have had countless situations where working together with a title company has enabled them to close sales that might otherwise have been delayed.
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