Everything You Need to Know About Title Insurance

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If you’re looking at downtown Phoenix condos, you may want to become educated on the basics of title insurance. Purchase of a policy at Scottsdale condos closings can save you from a multitude of potential legal and financial issues that problems with the title search to your property could cause.

What Is Title Insurance?

Anyone purchasing Phoenix condos should have a title search performed before closing, as more than one-third of all title searches uncover a problem that can and should be resolved before purchase is completed.

After your sales contract has been accepted, a title researcher will examine public records to scout out any problems with the title, a process which involves reviewing several years of real estate records. This search is intended to make sure the property actually belongs to the seller, that he is free to sell it and that it can be transferred to you at the time of closing free and clear of any other liens. However, title searches may miss serious problems, so homeowners should take the step of buying an owner’s title insurance policy.

Potential Problems With Property Titles

Title problems range from fairly minor to potentially disastrous. A title search may reveal, for example, that the previous owner had failed to pay property taxes or had minor repairs done and had not paid the contractor. It may even be found that the seller doesn’t really own the property, that the home is part of a conflicting will or actually belongs to undisclosed heirs.

Why Buy Title Insurance?

Although a title search should technically uncover any problems with the title, there are cases in which a problem is accidentally missed or is not in the public records. Purchasing an owner’s policy of title insurance will help protect your purchase from the fallout of these unforeseen problems. The policy is purchased at closing for the amount of the real estate purchase and is in effect for as long as you or your heirs own the property.

What Kinds of Issues are Covered?

Owner’s title insurance covers a broad range of potential problems, ensuring that your title company will stand behind you, even covering legal defense if necessary, if a title problem arises after the title search is done and you have bought your home. Common issues include forgery, undisclosed heirs, omissions/errors in deeds or mistakes in examining records during the title search. If you’re in the market for Phoenix condos, check on how this insurance is requested and how it is paid for in your area, as it is not an automatic part of the closing process.

Title Insurance and Refinancing

Refinancing of downtown Phoenix condos is considered a new loan and involves a new title search to ensure full protection of your real estate investment. However, if you bought owner's title insurance at your original closing, the policy should still be in effect for as long as you or your heirs own the property.

Title Insurance and New Homes

Even if you build a new home, you are unlikely to be the first owner of the undeveloped land. There could be many prior owners, and could possibly be liens against the property. Any prior builder or subcontractor who was not paid could place a lien, and purchasing an owner’s title insurance policy will cover any possible problems and associated legal fees.

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