When you’re buying a house or an apartment, you are mostly looking forward to the future you will enjoy – and that’s perfectly fine. However, you also need to think rationally about all the risks that buying real estate sometimes carries with it. Therefore, having title insurance is extremely important. If you are wondering why title insurance is such an important item – we will give you at least 5 reasons for such a thing.
The Significance Of Having The Insurance Policy
Today’s insurance system is based on the probability – that is, the risk of something happening. Although we don’t know when and whether an accident will happen – we can always, (by analyzing the data and the given circumstances), calculate how likely it is that something will happen to someone in a certain situation. That probability is generally low, but you know what they say: Never say never! This especially applies to insurance when buying real estate, because if an accident happens, the damage is great.
What Is Title Insurance Used For?
Buying a property is one of the greatest decisions that we can make during our lives. Not only will you become the owner of the property – but you will be investing your finances (perhaps life savings) in the entire process.
Therefore, you should think carefully about all aspects of purchasing real estate. One of the aspects is title insurance. This is a specific type of insurance that you pay only once when closing a financial transaction at the time of purchase. This type of insurance provides you with financial and legal protection that you could suffer as the future owner of the property you are buying.
Reasons For Getting Title Insurance
1. This insurance model protects your finances
As we have already said, the risks we are exposed to today when buying real estate can be great. Many reckless buyers have become victims of fraud in real estate money transactions. Therefore, you have to be very careful.
Keep in mind that the funds you invest in real estate are large – so it would not be convenient for you to make a wrong choice and lose your investment. Title insurance serves to ensure your purchase of the real estate by the existence of your property rights on the purchased property. You can certainly buy a home insurance policy – but it only covers the structure, that is, the building and what is inside it. Title insurance protects you not from floods and other disasters – but it protects your rights as an owner in case of unforeseen situations such as a mortgage over the property you want to buy, insufficiently clear property rights, illegally constructed buildings that can be listed for sale, etc. . Therefore, title insurance provides primarily your investment in a particular property, protecting your legally acquired property rights.
2. Having a title insurance policy reduces risks to a minimum
Like any other purchase, buying a house carries with it risks or problems that may be invisible at first glance. We have already mentioned this, but some more possible issues must be added. It is very common for buyers to have problems with a real estate appraisal report – or with unpaid taxes, unknown owners, or litigation related to property. Then it is important to have not only title insurance but also a complete range of services provided by such companies – from insurance, through the provision of legal aid and legal services, to the completion of a financial transaction when buying real estate.
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3. Property encroachments
Although we may not be aware enough, this phenomenon is far more common than we think. Imagine you just bought a house with 10 or more acres, and your first neighbor builds across the border of your property. In any case, when there is an encroachment on property, you can be sure that your title insurance will pay off. Namely, in that situation, you can count on the title insurance agency to help you determine the facts – as well as to provide you with the necessary legal assistance and the services of a lawyer if you need them.
4. Forgery of documents
Real estate prices have risen, but the turnover is much higher – so all this is used by various fraudsters. We are already familiar with the phenomenon of multiple property sales, which is the most difficult for buyers. However, in recent years, new types of fraud have become typical, among which falsification of documents is very common.
So you have to be very careful, and title insurance will provide you with additional security in such situations. Namely, this type of insurance will provide you with professional and efficient cooperation in terms of checking all the necessary documentation. You certainly wouldn’t be able to do this on your own because you don’t have access to all sources of information – as is the case with title insurance agencies.
5. The title insurance will make it easier for you to sell the property
If you want to buy a property in which you will invest, and later you will list it for sale – owning title insurance is of great importance. Namely, when you secure the rights over the property well, it is quite certain that you will sell it easier and better later. Today, many property buyers are willing to set aside more money for real estate that is “safe” – than for an even cheaper option that offers them no guarantee of the legal correctness of the property itself. Legal real estate that has title insurance and all the necessary documentation will be listed for a higher price than those that do not have it – even if they are located in the same neighborhood. So, you will always sell the property with all the necessary documentation easier, faster, and better.
The Bottom Line
We hope that we have given you enough reasons to understand that title insurance is a necessary item in making real estate sale-purchase deals. Finally, once you get a title insurance policy, you can breathe a sigh of relief and feel carefree – because you know that your money will be safe – and that you will enjoy your new home or a condo you are buying.