There are so many ways to have problems when you buy or sell a home, it befuddles me when folks go it alone.  However, that is another issue.  What we are discussing here is title insurance and why it is so very important for buyers to make sure they are covered on their purchase.

        Title insurance is, basically, insurance for the buyer of a home to be protected from any “blemishes” or clouds” on the title for the property.  This blemishes, clouds or issues are many and can cause a buyer from losing not only the property, their money too.

        Title insurance insures (protects) the buyer from any liens or other claims to the property not discovered when the title company did a title search prior to the sale.  Now while it is their job to check every possible place for any claims against a piece of real estate, they are either missed, overlooked or not available at the time of the title search.  How is that possible?

        Well a good example is a mechanic’s lien on a home.  The seller had some work done prior to sale and did not pay a company or individual for services rendered.  The company or individual places a mechanic’s lien on the property.  The lien remains and is “discovered” when the title company does the title search.  The owner then must clear the lien before the sale.  This is a protective action many small businesses must use to collect debts from some of their customers.  Otherwise they would go out of business.  Home owner associations and the like also use liens to collect debts from owners who refuse to pay their assessments.  The title is clouded or blemished and must be cleared prior to sale.

        Going back to title insurance, there are several types commonly issued: residential owner’s title policy, a mortgagee’s title insurance policy, a leasehold title insurance policy or a certificate of sale policy.  Each is issued for a specific purpose and for different entities involved in a sale or a particular type of sale.

        The main point to remember is for a home buyer, a title insurance policy is a contract where the buyer is protected from losses arising from defects in the title.  Here in Texas, we use a title policy that insure good and indefeasible title to a property.  This means if there is a claim, it can be defeated.

         My hope is this example of one of the very important parts of buying a home is of value to you and again underscores the importance of using a real estate professional when buying or selling a home.

        As always, call me at (210) 273-9082 with any questions, without obligation.