Is Title Insurance Necessary?
So, you're buying or thinking of buying a home or other type of property and in your course of learning you may find yourself asking if title insurance is really necessary.
In a word - absolutely
All kinds of inconvenient, time-consuming, costly and even horrific circumstances can happen without it. To understand why title insurance is necessary, first understand what it is.
Imagine getting a knock on your door one day, perhaps a few months after closing and having put a lot of money into your new home and "cousin Jim" of the previous owner shows up and says "I'll take that room over there", Of course, you reply, "no,you will not" and the litigation ensues.
Maybe the former spouse shows up and demands their "fair share" of the equity, or an heir presents and states the home actually belongs to them and has paperwork backing their claim.
That's just the beginning ...
Easements and liens can also be bad news brewing without title insurance.
Let's say you as a happy new home owner, didn't realize the previous owners expansion, an extra bedroom extended a foot or two into a shared driveway, a documented easement, both you and your neighbor use. The extension wall built while your neighbor was vacationing for a couple months touring Europe. Upon your new neighbor's return he can't get through the driveway to his home. Imagine your horror when your neighbor legally forces you to shave that foot or two off the new bedroom on your dime. Ouch!
Or, let's say you're moving into your new home, a day or two after closing, and you just love the new dimensional roof, windows and exterior paint, so proud! The problem is the previous owner short-changed the roofer and window installer who both filed liens and you're forced to pay the lien before ever selling your new home and adversely affects your credit if you don't. Ouch!
Had you gotten title insurance, you would have been protected from these claims.
And then there's fraud ...
While we'd all love to believe people are by and large honest, forged real estate documents can deep fry your dreams without title insurance. Mortgage fraud happens more than people think. "Straw buyers", unscrupulous lenders, straw sellers, and small armies of con men can steal your home out from under you. Those with title insurance have much greater peace of mind for the protection it affords.
Is it necessary? Absolutely! And a reasonable one time expense.
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Thinking about buying or selling your property? I'm here to help. Amy Rodriguez 928-202-6149, The Queen Team, Keller Williams AZ Living Realty, Kingman, AZ.