Protect Your Miami Real Estate Investment with Title Insurance: The Ultimate Guide to Understanding the Benefits
February 23, 2023Title and escrow companies are responsible for protecting the legitimacy of a real estate transaction. As such, part of their services entails issuing the appropiate title insurance policies to protect buyers and lenders after closing.
If you plan to buy a property, never doubt the benefits that a title insurance policy can provide down the line.
What Is Title Insurance?Title insurance is an owner's primary defense against encumbrances that could affect the validity of a property title. They protect the owner's rights from issues overlooked during the title search. If there are legal issues jeopardizing the sale, an insurance policy preserves the buyer's investment and keeps the mortgage lender from suffering financial loss.
Title searches are the ideal starting point to find many legal inconsistencies, but there's no shortage of hidden problems that can affect a property's marketability down the line. The right title insurance policy might be the saving grace to avoid stress in the years after closing a real estate transaction.
Benefits of Having a Title Insurance PolicyTo get the full scope of the benefits of title insurance, you need to understand how they work.
Before issuing a title insurance policy, the title and escrow company needs to conduct a title search. Title searches are essential to ensure a successful closing, as long as the errors revealed during the search are resolved in advance. Title and escrow companies have the means to perform a thorough title search, but they also acknowledge the possibility of hidden errors that could jeopardize the owner's rights over the property.
This is where title insurances become an ideal long-term protection to counter unforeseen circumstances involving fraud, legal gaps, etc. While title searches protect the buyer's interests before closing, a title insurance policy works as a protection against any claims or issues that arise after closing.
If the property's ownership comes into question after the transaction is finalized, the title and escrow company provides the needed support to help buyers solve the issue. This entails legal counsel as per the county's laws and payments to help owners defend their rights during court proceedings.
Here are the different ways in which title insurance can help owners:
- Title insurances protect you from fraud. In some cases, clients find themselves dealing with forged documents, and a title insurance policy is the best way to protect their finances.
- Forgery is only one problem that could put the property's ownership into question. A title insurance policy can cover a variety of issues affecting your rights as an owner. These issues generally take the form of claims placed by undisclosed heirs or previous transfers that went unaddressed before settlement.
- It's not uncommon for new owners to suffer the consequences of unpaid taxes. If a lien is placed on the property, a title insurance is the best way to avoid bearing the brunt of it.
- Protection against liens placed by creditors before the transaction. In this scenario, a creditor may declare that the property's owner is indebted to them, and title insurance is your best bet.
- A title insurance policy can also protect you from errors overlooked during the title search. If these errors aren't corrected when all relevant documents are put on record, the legal consequences may also cost you a lot of money.
- With the right insurance policy, you can avoid the legal costs that result from any of these claims and even get a refund in case of financial loss.
Which Insurance Policy Is Right for Me?Let's review the two main title insurance policies during real estate transactions.
- Homeowner's insurance policy: As the name suggests, an owner's insurance is meant to protect the buyer's ownership after closing. The policy's coverage remains in place as long as you or your heirs own the property, making up for the costs of hidden liens or other legal claims over the property. It will also protect owners from easements limiting the use of the property.
Owner's insurances are often part of the requirements made by a buyer's mortgage lender, but there are instances in which the seller is the one paying for the policy's coverage. This is largely determined by the practices adopted by each county.
- Lender's insurance policy: This insurance policy is designed to protect the mortgage lender from financial loss, and it usually comes in handy during ownership disputes or when a lien is discovered after closing.
Buyers need to pay for a lender's insurance before being granted a mortgage and the policy remains in effect until all loan costs are fully repaid. Likewise, the policy ensures that the lender has the top claim on the property if the debt remains unpaid. In the event of fraud, mortgage costs will be covered by the title company.
If you plan to buy your dream house or any other real estate property, make sure to enlist a renowned company with proven experience in the area to guide you through the terms of your policy coverage. The support of a knowledgeable title and escrow service will save you many headaches while managing all the responsibilities that come with making a real estate purchase. Among other things, this entails securing solid protection against potential ownership disputes, so you need to check the company's professional history to make an informed decision.
Get your title insurance from the most reliable company in Miami. The specialists at Key Title & Escrow have issued countless title insurance policies statewide. We help provide the best solutions to match each property and our methods are tailored to the client's conditions, whether you're a buyer or a seller. Avoid a stressful situation during your real estate transaction and contact Key Title & Escrow. Just call (305) 235-4571 or toll-free at (800) 547-0006, and we'll be happy to answer all your questions. You can also fill out the contact form on this page to get in touch with our specialists.