Title Searches and Owner’s Policy of Title Insurance – What You Should Know
An owner’s title insurance policy is required alongside a lender’s title insurance in order to provide the lender and the new titleholder with security in the event that any problems or discrepancies arise regarding the validity of the title. To prevent such problems from appearing as an unpleasant surprise, title insurance searches are performed by the insurance company that issued the policy. Knowing more about what title insurance means and what a title insurance does is essential information for any buyer. Whether you just bought a large commercial property, and are seeking to make a lot of money off of it, or you just purchased a small apartment you want to live in on your own, it can be extremely important to understand what an owner’s title insurance search is all about.
Before looking into what title searches do, it’s important to understand what title companies are all about. A title insurance company is the company that issues both owner’s and lender’s title insurance, and they are in charge of the title search process and the commitment of title insurance prepared either with the lender or the buyer in mind. Title companies are free to make up their own offers and rules regarding how much they charge for a title policy and what the title search will entail; however, they typically have to follow a few strict rules both with regards to searching real estate records and to the decision of which discrepancies they are searching for. Once drafted, the policy should include all the essential information about how much the policy costs, what level of protection is included, what types of searches are made and what the title company is able to do to protect the buyer or the lender from title problems, other liens and other possible owners making a claim to become the official titleholders.
So, what is the title that a titleholder possesses anyway? A title is the official evidence that states the titleholder is the accepted owner of the property and that no other persons or organizations can claim ownership. If the right of titleholder can be established, then the person on whom that right is bestowed, can claim ownership even if they don’t currently reside in or if they haven’t made a purchase for the property in question. Title searches are meant to discover such cases before a potential buyer purchases the home, either using their own money reserves or a mortgage loan. A title search is meant to check old records dating back decades or even hundreds of years in some cases. While many old documents or the records that they exist might be lost, title searches are not infallible. Nevertheless, title insurance covers the cost that you’d normally have to cover while defending yourself against any claims coming from possible titleholders.
What makes a title insurance policy most effective is the fact that the title search can discover a whole variety of title related problems that would normally go unnoticed and unchecked. Some of these can include documents executed under expired or revoked powers, undisclosed heirs, false impersonations of people who could normally make a claim to the title, mistakes and omissions that resulted from past real estate transactions, poorly recorded legal documents, errors in tax records or forged deeds and mortgages. It’s important to note, of course, that not all title policies are the same. In fact, buyers are not only allowed, but also encouraged to shop around after owner’s insurance policies and decide which ones might be best. A title company that specializes in dealing with old records and homes that have been around for more than a hundred years, for example, will typically be ideal when purchasing an old mansion somewhere on the East Coast.