If you have been considering owning or selling property anywhere in the United States, you should pay attention to what title insurance is and what to do if it is not approved for a home you want to sell or buy.
What is title insurance?
Title insurance can be defined as insurance against any loss caused as a result of a defect in the property title. This is because sometimes state laws and local restrictions on a property can sometimes hamper the property.
Why is title insurance so important?
One of the most popular questions is: Do I need to get title insurance? And the answer is an emphatic YES! As an owner, it is always important that you purchase title insurance coverage so that you are properly compensated for damages or legal costs when unexpected realities begin to appear.
In the United States, a policyholder with title insurance coverage will receive a payment if they discover that there is something wrong with a property title. It is a great risk not to have it if you are playing in the real estate niche.
It also protects lenders from financial loss if there are pending lawsuits and liens.
Main challenges faced in title insurance
Some of the common challenges policyholders face when it comes to title insurance include, but are not limited to:
- Undisclosed liens
- Missing heirs
- Errors in public records
- False impersonation of previous owner
- Disputes survey
- And undiscovered will
If you face any of these title insurance challenges, it is in your best interest to seek the help of a professional attorney before turning to your insurer to file a claim and receive adequate compensation.
What to do if title insurance is not approved for a home
For many reasons, title insurance may not be approved for a home. If it happens, don’t panic, there is still something you can do to turn the hands of the clock.
Here is a list of tactical things you can do if title insurance isn’t approved for a home:
- Find out why title insurance was not approved and start the process of solving it right away
- Contact your real estate agent and title insurance company to work together to address the title problem. Often, it is not always a big problem.
- Contact the appropriate parties that affect the title and resolve the problem with them. It could be the heir who just found out about the property.
- Check your documents one more time to make sure there are no typos that invalidate the title. Happens.
- Reapply once you have finished solving all title issues so custody can continue.
Do you have to have title insurance to buy a home?
The answer is yes and no. I’ll explain it to you. If you are borrowing money from a lender to buy a home, you will be required to pay the lender’s title insurance as part of your mortgage closing costs. But owner’s title insurance is optional. You can choose to pay it or ignore it.