What is Title Insurance?

Do I really need it?

This housing market is competitive. You are excited to put in an offer on a home. As you begin working on your financing, title insurance comes up as a line item. What is this and do you really need it?

How title insurance works

When a property is financed, purchased, or sold, a record of that transaction is filed in the public archives. This legal right of ownership that is recorded is your “title”.

• First check for a clear title. Your title company will make sure the entity selling the property has clear ownership and right to sell it. A complex title search will look for issues such as errors in public records, unknown liens, illegal deeds and missing heirs.
• Then as part of the underwriting process any issues are addressed and potential ones are assessed. A quote for a title policy is offered based on these risks.

What does title insurance cover?

Title insurance protects the lender and the buyer from being required to fix defects to a property such as:

• Disputes regarding ownership by another party
• Falsified documents including deeds or incorrect signatures
• Flawed records
• Outstanding lawsuits and liens such as contractors that weren’t paid in full for their work

Why do I need title insurance?

Lender’s title insurance is usually required but owner’s title insurance is optional. An owner’s policy protects the buyer from any issues that may arise and protects their equity in the property. This policy is important on both new and existing homes. Title issues could have to do with the land or building during the process.

Who pays title insurance?

In most cases the buyer pays the title insurance. Title insurance is a one time purchase. The price is based on the selling price of the property. Our team at Blue Ridge Title Company is happy to provide estimates for title insurance based on contract price.

Blue Ridge Title Company is your local Morristown attorney owned and operated title company. We are here to serve you and help you in your residential and commercial real estate closings as well as title abstracts and examinations. We are efficient and knowledgeable in the closing process. Reach out to us for your real estate needs.