WE ALL have heard the words “cyber fraud”, “wire fraud”, “email phishing”. We all think, “This would never happen to me.” Wire fraud happens more often than you think.
More than 80% of Americans purchase title insurance with their new home. Whether you’re an agent looking to protect your clients, an investor hoping to flip a property, or a new homebuyer eager to purchase your first house, title insurance is a necessary service that will minimize the risk of your investment.
When you purchase a home, the seller promises that he or she has the right to sell that property and that there are no legal disputes over the ownership of the property -- in other words, the title is “good.” Despite the seller’s assurances, however, legal claims and property disputes can arise well after the transaction has taken place. Even if the seller warrants good title in the deed, the seller may not have the money to pay for losses when a problem surfaces.
Title insurance protects the property rights of the buyer and ensures that his or her investment is preserved in the case of a legal dispute. For buyers, title insurance is a promise that the time and money put into a real estate purchase will not be lost due to a fault in the transaction.
Property passes through many different hands as the years go by, whether through a purchase and sale or through inheritance. Title is only considered good if each transaction and/or devise or inheritance was proper and legal. Title companies research the chain of ownership before issuing a title insurance policy. If problems are found, the company attempts to resolve them before the closing. Common problems include split ownership, inheritance disputes, and even forgeries and fraudulent sales or foreclosures.
Typically, where the buyer is financing the purchase of the property, the lender will require a lender’s policy of title insurance. The lender’s policy ONLY protects the bank or lender from liability if a title dispute occurs – it does NOT protect the buyer. A homeowner cannot make a claim under a lender’s policy of title insurance. An owner’s title insurance policy is the only way to protect a property owner’s rights in the property.
Working with a title company is the best way to protect the buyer’s property rights. The cost of the premium is regulated by Florida law. Most title insurance costs around 0.5% of the value of the home. The cost of title insurance is always a one-time fee paid at closing. Although the coverage may differ slightly, most title insurance policies include the same basic elements.
Title insurance shields a buyer against covered title defects affecting the property thereby protecting his or her ownership rights in the property. For a one-time premium paid at closing, a buyer can be assured that even if a dispute is legitimate, his or her title policy will protect him or her against loss from covered claims. Title insurance includes coverage for legal expenses which may be necessary to investigate, litigate or settle a title claim. An owner’s title policy covers an owner for as long as her or she holds an interest in the title to the property, and it automatically continues for the benefit of the owner’s heirs.
There are numerous title issues that could cause an owner to lose his or her property. Title disputes occur when there is any doubt over the ownership of a property. Below are just a few of the many title problems that might occur:
In the case of a title dispute, the current owner of the property may have to go to court and pay hefty legal fees. Should the claim prove legitimate, the owner may lose his or her title and associated property. Damages could include the cost of purchasing the property and any improvements made to the home. The owner will also experience the stress of losing a home they may have held for years.
Emerald Coast Title Services has been serving the residents of Northwest Florida since 1983. We are a full-service, ALTA certified title and escrow company where customer service is our number-one priority. With our decades of real estate experience, our knowledgeable team of licensed attorneys, closing agents, and title examiners are fully committed to making each closing experience effective and hassle-free.
Please reach out to us if you have any questions about title insurance or would like our assistance with a transaction. We have offices in Destin and on 30A for your convenience.