Question:
“My wife and I have never bought a home before, so there’s a lot we don’t know. For example, I’m sure we need title insurance, but it costs a lot of money so I’d like to know why we need it. Can you tell me?”
Answer:
I’d be happy to…
Title insurance insures you in case something is found after you own the property that affects your title. These things could have happened MANY years ago and not be found until days or even years after you buy the home.
Common risks include:
- Forged deeds or mortgages
- Deed by person who is mentally incompetent
- Deed by a minor
- Deed from a corporation, unauthorized under corporate bylaws
- Deed by partnership, unauthorized under partnership agreement
- Deed given under fraud or duress
- Deed executed under falsified power of attorney
Some good news: The seller pays for the “Owner’s Policy,” which is the costlier policy. You as the buyer pay for the cheaper “Lender’s Policy,” for your lender.
