Why Title Insurance Matters: Understanding The Coverage You Need

UNDERSTANDING THE ROLE OF TITLE INSURANCE IN YOUR HOME SALE

Welcome to TableTalks! I'm Carla Knight, a realtor with Coldwell Banker Realty, highlighting the ins and outs of real estate transactions in Metro Denver. Many of my discerning clients often ask about the three pivotal players in a home sale: the agent, the mortgage professional, and the title insurance company. Today, we're focusing on the latter and understanding why title insurance is indispensable.

WHAT IS TITLE INSURANCE?

Title insurance is a one-time paid premium that protects the buyer from past events concerning the ownership and interest in the property. This means it safeguards against losses arising from unknown clouds on title.

WHY YOU NEED TITLE INSURANCE

When buying a home, you expect the property to be free and clear of any debts or obligations not created by you. Title insurance ensures just that. It covers both legal expenses and claims for both the buyer and the seller, ensuring peace of mind and financial protection.

WHAT ARE CLOUDS ON TITLE?

The term "clouds on title" refers to any liens or encumbrances that could impair the ownership interest of a property. For example, your current mortgage is considered a cloud. Other potential clouds include liens placed by third parties. The presence of these liens needs to be resolved to ensure a smooth, hassle-free transaction with no repercussions from previous owners.

HOW TITLE INSURANCE WORKS

The title insurance company is the neutral third party in your transaction. Their job is to gather all necessary documents as agreed upon by both the buyer and seller. They also handle lender documents for deed recording and loan collateral. In essence, they act as a neutral  'scribe' of the transaction, ensuring every detail is accurately managed and documented.

IMPORTANCE OF A GOOD TITLE COMPANY

Making sure you have a clear title and the appropriate paperwork is crucial to your peace of mind. Without title insurance, you may find yourself facing unexpected claims that could jeopardize your ownership. No one wants to face a situation where someone could claim your property as their own.

CHOOSE THE RIGHT TITLE INSURANCE PARTNER

Having a reliable title insurance company and a competent title rep, like Jennifer Kelso Shaw from Guardian Title, can make a world of difference. Jennifer emphasizes, “Title insurance is important because it ensures that the buyer expects the property to be free and clear of any debts or obligations they didn’t create.”

CONCLUSION

Title insurance is an essential part of your home-selling transaction. Not only does it protect you from unforeseen claims, but it also ensures you can confidently enjoy your new property. If you have any questions about title insurance or clouds on your title, feel free to private message me or call. I can run a quick report to check everything is in order for you.