Ever wondered what title insurance is, or why it's important?
Your real estate broker is insisting that you have a title policy, and you don't understand the fees involved, why they are necessary and what even is this?
Sounds like a lot of mumbo jumbo, huh?
It's not.
Title insurance, simply put, is a form of indemnity insurance that protects lenders and homebuyers from financial loss sustained by defects in title to a property. It's one of the best things you can do to protect your biggest purchase: your home.
Okay, in plain English: want to make sure the house you're buying doesn't have any surprises, like back taxes, unpaid liens or a lawsuit you don't know about?
Title insurance discovers that on your behalf.
Do you know the people selling the house actually own it or are who they say they are?
Title insurance discovers that on your behalf.
How do you know the right kind of deed will be recorded with the right county?
Title insurance discovers that on your behalf.
And if it turns out after closing, such things are discovered, title insurance protects you by compensating you financially for your loss.
Example: say you bought a beautiful home in Meridian Kessler, one of the most prestigious neighborhoods in all of Indianapolis. Sellers seem nice enough, and after all, they live in a beautiful, Guilded-age mansion. "We're moving out of state," they explain, "and want to close in two weeks." A few months later, there is a knock at the door and you find a bewildered looking couple staring at you. "What are you doing in our house," they query, with a look of concerned perplexion. "Oh, you must be mistaken," you say. "I bought this house six months ago from a lovely couple who lived here". "No," they reply, nearly apopoleptic. "This is OUR house...it's OUR HOUSE! We leased it to a "lovely couple" when we went away to Florida for the winter and they sold it out from under us!"*
Author's Note: This is an actual case that happened in Indianapolis in the early 1990's.
OH NO!!
WHAT TO DO?
The tenants never had clear title in the first place. They falsified documents, listed the house on the MLS, sold it, took all the proceeds and split. However, they (or, more accurately, their unsuspecting realtor) made sure they closed at a title company--who issued a title insurance policy.
Fortunately, the title policy kicked in and compensated the new buyers their purchase price so they were able to find a new home, and the property was returned to it's rightful owners.
While it was an awful situation, both buyer and rightful owners were protected from what could have been a nightmare.
Don't let this happen to you.
Hire a title company to take care of all of this.
But wait...what if there are fees involved? Can't I do a quick online search myself and skip the fees?
I mean, you could.
You could DIY your own dentistry, if you really wanted to.
But if you mess it up, it's going to be extremely painful, expensive and embarassing.
Remember:
Just because you could doesn't mean you should.
Title companies do this every day, all day, 365 days a year...leave it to the professionals.
Too much can go too wrong too fast.
If there's an issue later, the court system is unlikely to look favorably upon you for eschewing the reasonable title fees and doing it yourself.
With (at least) 30 title companies in Indianapolis--and nearly 9,000 licensed real estate brokers--it makes little sense to tackle this technical issue on your own.
If you're thinking about buying or selling your home, ask your real estate broker which title company they recommend. Many title companies are delighted to explain the process to you and are here to help. If you ever want to start the conversation, you know who to ask.
For those of you who clicked on the hyper-links, THANK YOU.
Don't be like a certain well intentioned, wealthy industrualist who thought starting his own dinosaur theme park was a good ides.
With professional-level, Jurassic Park, Jeff Goldblum-esque gratitude,
Miriam
