How Much Is Title Insurance Really Worth If You Buy a Newly Built Home?
Sometimes people might think that they shouldn’t get title insurance simply because the house they’re buying has just been built recently, and they are the first owner who sets foot in it. However, even with new homes there are often important issues to be resolved with the title, as the past owners of the property that your home was built on could still have something to say when it comes to claiming the property as their own or bringing forward various documents that might provide them with a legitimate claim on other aspects of the property.
Title Insurance for an Older Property
Whether the home you just bought was newly built or not, the property it stands on likely had many owners in the past. The problem with avoiding title insurance in such cases is that it’s always a lottery. Without a proper title search, you never know what to expect or who might still have a lien or a claim on part of your property or even the whole area. Even if the property itself has no history, the builder might have failed to pay important fees to a subcontractor, who will eventually return to collect on the debt by placing a lien on your property. Being prepared by getting a good title insurance policy and conducting a title search is the best way to counter any of these issues before they even come up.
How Much Do Building Codes and Limitations Weigh in?
If you think title insurance isn’t worth much when it comes to newly built houses, let’s just consider the houses themselves for a moment. The early 2000s have shown many clear examples of home buyers purchasing newly built homes that were built without taking into consideration details such as the county building height limitations. A few years later, the rule was enforced, and many homeowners were forced to reduce the height of their roofs or perform other modifications at their own expense. Title insurance can prevent problems like these from ever affecting you in the future.
Another Example of Why You Need Title Insurance for a New Home
Let’s say the home you buy is situated on a subdivision of a larger property which was owned by several family members who used to live there. If one of them sold the property without the knowledge or consent of the others, some, or even all of them might come back to claim their rights as titleholders. In such a case, the potential dispute can become a real problem, and it is within the right of the past owners to file a claim against you. Without title insurance, you’d quickly lose ground when faced with such opposition.
Will Your Insurance Cost More?
While it might be more work to get records from decades ago, when the property was last in use, your insurance shouldn’t normally cost more than the average title insurance policy in your area. The insurance company will provide you with full support when it comes to conducting a title search and solving any underlying title defects, such as forged deeds and releases, mistakes of recording legal documents and false impersonation of the actual property owner. If you want to avoid any problems in the near future, don’t ignore the importance of obtaining your title insurance policy.