What Is Title Insurance?

Good question. Just about every time real estate changes hands bother the buyer and the lender get a title insurance policy. If there is a lender involved, you have to get title insurance. Title insurance companies (i.e. First American Title or Title One) also have an escrow department that helps facilitate and close the transaction. Anyhow, title insurance covers the buyer from the day of closing back into the past (forever into the past) and insures that the title is clear and can be sold. Once in a while we hear of a news story of a forgery where a property was actually sold. This protects the buyer and the lender from someone coming out of the woodwork who has an interest in your property. The bank would not like that. There is also an upgrade available that First American has called 'the eagle policy.' This is a gem. It usually runs less than one hundred dollars and protects you into the future against things such as boundary disputes, permit violations, CC&R and ACC violations, unrecorded contractor liens, and many more bad situations. Now some of these things have a deductible, but it's a great policy. I always recommend this for all my buyer clients. Especially for new construction. With all these builders going under, you need this extra protection that all subcontractors got paid and that everything was done to code, etc. Also, if you sell your home within 2 years of when you purchased it, make sure to tell your title company. They give a discount. And, it doesn't matter if you are closing at a different title company, they all honor the price reduction. This is good because here, typically the seller will pay for the buyer's policy (the more expensive one) and the buyer pays for the lender's policy.