Is Title Insurance Required in Florida?
September 13, 2018It's been said, and rightly so, that the decision to buy a home is one of the biggest decisions you will ever make. It certainly is. It can also be a very stressful experience, especially for first-time home buyers. There is so much involved in the process. It can seem like you are navigating a minefield and at risk of stepping on a landmine at every turn. First, you have to find the property you want to buy, then you make an offer on it. That's when the fun begins. You need to wait and see if the seller will accept the offer, and if they do, there are inspections, title searches, and all kinds of little details necessary before you can actually start the closing process. The closing process is the process that will eventually put the key to your new home in your hand. All you need to do is get through the closing process, which typically involves not only the buyer and seller, but also a real estate agent or a title company, or both. There might even be lawyers present. Many first-time buyers don't understand terms like escrow, title insurance, or even how taxes on a house work. Title insurance is important and should be considered when you are buying a home.
What is Title Insurance?Let's first examine what title insurance actually is. A title agency provides title insurance. Title insurance is insurance that protects the buyer of a property in case there are issues with the property not uncovered in a title search. When purchasing a home or property, there are a number of things that could go wrong with the sale of the property, even long after the property has been purchased. This is where title insurance comes in handy. There is an added expense for purchasing title insurance, but you can easily justify that expense when you weigh against any potential loss should there be a problem with the purchase of the property down the line.
Here's how it works. You get a title when you purchase a home or property. That title says you are the new owner (or will be when you pay off the loan for the property with your lender). You buy a home or property with the assumption the person selling the home or property has the legal right to do so, meaning they have a free and clear title that can legally be transferred to you. This is typically the case, and there are usually no problems that arise to cause issues. Unfortunately, many issue could arise that might cause you to lose the right to your property even after closing on it. This is why a title search is done. Title searches can uncover issues that might prevent you from legally owning the property you have begun buying. Title and escrow companies often provide title searches for you to determine if a property truly has a clear title. They can also provide title insurance, which can protect you in case a claim against your property comes up at a later date.
Is Title Insurance Required in Florida?There are two types of title insurance. One protects a lender and the other protects the buyer. They might be referred to as owner's title insurance and lender's title insurance, or more appropriately, an owner's policy and a loan policy. If you are purchasing a home or property, there is a good chance you are purchasing the property with the help of a loan. In Florida, as in all states, any federally insured lender will require you to have at least a loan policy. Chances are good you will not be able to get a loan without having title insurance that protects your lender. Simply put, the lender is taking a risk and they want to be covered should an issue arise down the line that puts the house or property you're buying at risk, which then puts their money at risk. A loan policy, which will be worked into the closing cost of your loan, will ensure the lender is protected down the line should another claim against the property arise even years after you have closed on the property. To answer the question, is title insurance required in Florida, yes, at least in the case of a loan policy.
An owner's policy is not required in the state of Florida, or in other states as well. As long as the lender is protected with a loan policy, you are free to go ahead with the closing. Keep in mind, however, having title insurance in place that protects the lender doesn't mean you, as the buyer, are protected. In fact, if an issue comes up that brings the legality of the property you're buying into question and you aren't protected by owner's title insurance, you are at risk of losing the property and all of the money you've put into it, even if a claim comes up many years later. The lender will be protected, but you will not be. You run the risk of losing everything. This is why having an owner's policy is a very good idea. Even if you believe a title is free and clear and that the seller has the legal right to sell the property, there are many unforeseen issues that might even be unknown to the seller of the property.
Why You Should Have Title InsuranceHow a house or property is titled can affect your purchase. The property you're going to purchase could be titled as joint tenancy or tenancy in common. There could also be a right of survivorship claim, meaning there is another party who could claim the property if one owner passes away. These issues are all very similar because two or more people have a stake in a home or property, and without both parties giving permission, the title cannot be legally transferred. This is one of the reasons title insurance for the owner is a good idea. If you've purchased title insurance for yourself, as the buyer, and not just for the lender, you are protected against this type of situation. While a title agency does the research to make sure a home or property is free and clear and that the seller has legal rights to possess and sell the property, there are many instances where the title search doesn't reveal all issues. These issues are known as title clouds. Besides those already mentioned, there are a number of other circumstances that could put a title's legal status in question.
Other reasons a title might be clouded include, but are not limited to, liens of any kind, including construction liens, tax liens, and any lien where the house might have been used as collateral. Other issues can include foreclosures, instances where the house or property may belong to someone else through inheritance, and eminent domain. A seller can't sell the property when any of these problems are found during a title search. These clouds must be resolved before the closing can take place. Some contracts are written to give the seller time to cure, or clean up, any issues with the title. This delay in closing allows the seller to fix the issues and then proceed with the closing as scheduled.
How to Get Help with Real Estate Closings and Title Insurance in FloridaIf you happen to be purchasing a home or property in Florida and you want to make sure you have title insurance as well as help navigating the closing process, a title agency is the place to go. Finding a reputable and dedicated title agency for all your title and escrow services is the best way to get through the complicated process of buying real estate. At Key Title & Escrow, we can not only help you find the title insurance you need to protect your investment, we are also your best option for anything concerning the purchase of your home. We provide all of the important title and escrow services you need, with a trained staff at the ready. Our services include property title searches, searches for any judgements and liens, recorded owner searches, Florida title insurance for lenders and owners, homeowner's insurance, and a variety of other services related to real estate closings.
Key Title & Escrow is the best Florida title and escrow company in the state. We've been serving the real estate industry for more than 21 years. We've developed a professional reputation and a reputation for facilitating the most efficient closings. At Key Title & Escrow, we take pride in our work. We are dedicated to providing customer service that adheres to a high set of standards. Our professionalism, our reliable service, and our commitment to getting the job done is our number one priority. If you are ready to buy a new home and you want the best title and escrow services in Florida, make Key Title & Escrow your choice. You will never be disappointed in the quality of service you get from us. Whether you are a buyer, seller, or a real estate professional, we are equipped to handle all your real estate transactions.
Rest assured, we are big enough to any job done and small enough to handle every closing like it is our only closing. That's how personal our service to you is. We handle closings state wide and offer after-hours closings to make it convenient for you. We will always have your best interest at the heart of everything we do. Our goal is always to provide you with the smoothest, most efficient, error free closing possible. Contact Key Title & Escrow today to see how our closing services are the best real estate closing services in Florida.
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