All homes have a “chain of title” composed of many public records that describe their ownership history. Those documents include tax records and deeds going back to their original sales. Unfortunately, competing ownership claims and lawsuits sometimes arise against homes because their title histories become so complex. Protection against future legal problems is one reason for the importance in title insurance when buying new home.
What is a Home’s Title?
A home’s deed is not a title though it’s a part of it. There is, in fact, no single document that comprises a home’s title. Rather, a title contains any public records about a home. These records include deeds of all types, tax bills and records, assessments, any liens placed on the home and similar documents. County clerks or registrars typically maintain the title records to the homes in their jurisdictions.
Why Examine a Home’s Title?
When representing homebuyers or sellers, it’s very smart to have the titles to the properties being bought or sold examined. Experienced title examiners and title companies look at a home’s title records and try to spot any deficiencies or “clouds” on it. A “cloud on title” can include old ownership claims that were never settled, or tax liens that were never paid. Such clouds often present serious problems later on, once a home’s been bought or sold. There have even been cases of homebuyers later losing their properties after competing ownership claims were successfully pressed in court.
The Importance of Title Insurance
Title companies provide most home title examination in real estate markets. After a title company examines a home’s title it creates what’s known as an abstract of title and then issues title insurance. This valuable form of insurance helps protect a home’s seller and its buyer against any deficiencies or defects in its title and provides peace of mind. For example, title insurers frequently defend home sellers and buyers against lawsuits brought by past owners, or even strangers, making ownership claims.
There are many cases where real estate agencies and individual agents found themselves involved in court fights over properties they’ve helped sell or buy. Title insurance is a valuable resource that helps guard real estate firms and professionals against potentially costly title problems. Contact us today to discuss our title insurance products and offerings.