When it comes to the legalities of purchasing a home, the process can be so convoluted that it becomes overwhelming and you forget to complete important aspects of due diligence. One of the most common of these forgotten items is a title search and subsequent title insurance.
Let’s start with two examples.
- The property you have just purchased was part of an inheritance settlement between three siblings 30 years ago.
- During the settlement, two of the siblings forged the signature of the third sibling to allow the property to be transferred to the remaining two without the third’s knowledge.
- The settlement clears
- The property is sold and purchased a number of times between this occurring and you owning the property
- The third sibling is made aware of what has happened and raises a claim against part of worship of your property
- The sibling seeks financial compensation or can and will foreclose your home for the purpose of recovering said funds.
- You are enjoying the benefits of the Groupon Coupons page for Motel 6 in a way that you never thought you would.
While it may sound ridiculous that you should be held financially accountable for an incident of fraud decades ago, the truth of the matter is that it will indeed fall to you.
- During the renovation of the property prior to sale, the previous owner hires a range of tradesmen to complete the work.
- One of the tradesmen is not paid for their extensive work and places a lien on the property
- The owner makes an arrangement with the tradesman to make monthly payments.
- The property is sold to you
- The previous owner stops making payments
- The tradesman forecloses your home to seek reimbursement for monies owed.
Again, this sounds like a ridiculous scenario however it can be a very real one. A lien is an official record place on the title of a home which allows the claimant to obtain funds from the sale of the home should repayments cease to continue.
How Can You Protect Yourself Against This?
When it comes to securing the title of your home, there is no better way than to conduct a thorough investigation into the title history of the property. If you aren’t familiar with the process or you don’t feel that you can complete it thoroughly, speak with a title insurance agent who can provide the service for you. Once they are certain that the title is clear from concerns they can offer you a policy for title insurance.
With a title insurance policy in place, should an incident like the one mentioned above be raised, your insurance provider will provide financial compensation to the claimant, leaving you to enjoy your property.
Ensuring the title of your home is clear of any concerns and security your ownership is a crucial part of the home buying process and one which, if overlooked, can have serious financial consequences for you and your family, not to mention being without a home.