Can You Buy Title Insurance After Closing?
October 10, 2018A lot of things go on at the closing of a house. That's why there are so many people, in addition to the buyer and seller, present. No stone can be left unturned. Every document must be signed and notarized, any inspections and their requirements must be met at closing, and any issues regarding the title of the property must be addressed and cleared before a transfer of title and money can occur. One of the things that must be done during closing is the purchase of title insurance. Unfortunately, closing is the time to opt in for title insurance or opt out.
Types of Title InsuranceThere are two types of title insurance. One is a lender's policy and the other is an owner's policy. In cases where a federally insured lender is involved, such as a bank, you will not have a choice. You will need to purchase lender's title insurance. The lender wants to make sure the money they are lending is protected from loss and will be paid back. A lender's policy stays in effect for the life of the loan, protecting the bank's investment. The owner's policy, however, is a matter of choice. You can opt out of purchasing owner's title insurance during the closing process but think twice before doing it. You may not be able to conceive of the issues that could arise with a newly purchased home, but there are issues that could have an impact on your right to own the property you have purchased. The consequences of not purchasing owner's title insurance could be huge. There is a myriad of ways that future claims could affect your right to own the property. Even if a seller is honest and not trying to "get over" on the buyer, there are instances when even the seller may not know of an issue that might arise. There could be construction liens on the house that were put in place before the current seller bought the house. These undiscovered liens could affect your right to the property.
What Does Title Insurance Protect Against?First, keep in mind that purchasing a lender's policy does not protect the buyer or seller in any way. This is where owner's title insurance comes in. Owner's title insurance does protect the buyer from many issues that might possibly arise at any time after the purchase of the property. Owner's title insurance is the buyer's assurance that the property being purchased can be legally sold by the seller and that no other party can lay claim to it. Title companies search diligently to ensure this is the case, but even during the most thorough search issues can remain hidden and may come up in the future. This is why, although a buyer isn't required to purchase owner's title insurance, it's a good idea. It can give you the confidence of knowing you are purchasing property that no one else can claim, and if something does come up, your investment in the property will be covered.
As stated, title companies perform title searches. The title search is a search performed by the title agency to help identify any issues that could cause a "cloud" on a title, which is an issue that must be resolved before the title can be transferred from seller to buyer. Title insurance is the insurance issued to protect you against those issues. Title insurance can protect you from claims against the property that may not show up in the title search. Some of the claims and issues that could threaten a title's ability to be transferred include forged titles, titles that have been misrepresented in any way, titles that have been signed by someone who is deceased, filing errors, false descriptions or representation of the property, undisclosed easements or liens, and many other unforeseen issues that could cause an issue with the legal sale of the property. Title insurance only needs to be purchased one time and protects the buyer forever. It also protects the property after it has been passed on to the buyer's heirs. Once closing has occurred, you will not be able to purchase this title insurance. The cost of title insurance varies depending upon where you get it, but it can range from a few hundred dollars to a couple of thousand. Whatever the cost, it is worth it for the headaches and heartache you might avoid if there is ever a claim on the property you purchase.
One question that might get asked is if there is a claim on the property you've purchased at any time in the future is, does having owner's title insurance prevent you from losing the property? The unfortunate answer here is that you can still lose the property if someone else has a legal claim to it. What the insurance protects you from is losing the money you have invested into the property up to the point of the claim. That doesn't mean that if there is a claim you can't work something out with the party who is making a claim on the property. There may still be a way to resolve the issue that leads to you keeping your property. That would be between the current owner of the property and the party who has the claim. It might even be something that would involve legal proceedings.
Who Pays for Title Insurance?Some states dictate who pays for the lender's policy or the owner's policy. In many standard contracts, the seller, as a show of good faith that title is clear, pays for the cost of the owner's title insurance. This, of course, can be negotiated. There is always room for negotiation and in some cases both parties may agree to jointly cover the cost of the insurance.
Where Do You Get Title Insurance?You are free to choose where you want to get title insurance, but usually the process is initiated by your closing agent, real estate attorney if there is one, or your escrow agent. The good news is, getting title insurance doesn't have to be difficult. If you are using a title and escrow company, they will get it set it up for you.
Key Title & Escrow is a Florida-based title and escrow company. We've been serving the real estate industry professionally and successfully for over 21 years. Key Title & Escrow is a full-service title and escrow company providing a full range of services to meet the needs of our clients. Our goal is to take the stress of buying and selling real estate away from the client by overseeing every aspect of the closing to make it a pleasant, trouble-free experience.
Over the years, we have built a professional reputation for quality, efficient closings. We've also developed relationships in the business that make it possible for us to provide the highest quality service to our customers. We strive to offer customer service of the highest of standards, and we take pride in the professionalism and honesty we always bring to the table. If you need title and escrow services, you can count on Key Title & Escrow to get the job done for you. Key Title & Escrow is the Florida title and escrow company you need when you are ready to buy a new house or property in Florida. Key Title and Escrow serves the entire state of Florida, and we even offer after-hours closing and settlement services to give you the convenience and service you deserve. When you are ready to close on the home of your dreams, let Key Title & Escrow be there for you from start to finish. At Key Title & Escrow, we are large enough to handle all of your real estate closing needs at a professional level but small enough to treat every closing with the highest priority and utmost personal attention. Our goal will always be to provide you with the absolute best in closing services. Don't let the stress of buying a home steal your joy. Contact Key Title & Escrow and let us help you close on your home or property today.
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