Palmer Harned, Realtor®
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What is Title Insurance? {Guest Post}

Today’s guest post is courtesy of Ruhi Mirza, attorney at Acer Title and Escrow. Acer Title is a highly rated settlement company who handles all your home purchase and refinancing needs as it relates to title (making sure the home is free from liens, past owner claims, etc). Ruhi is an established settlement attorney and is well-versed in issues with title and the need to insure it. Below she will discuss what title insurance is and why you need it.

What is Title Insurance?

The purchase of a home also comes with the purchase of many different types of insurance, such as homeowner’s and flood insurance. Title insurance protects your ownership of the property and the right to occupy, use, and enjoy the property.

How is it Unique?

Generally, other types of insurance protect against a possible loss caused by a possible future event. Title insurance protects the homeowner against future claims or losses caused by a title defect that occurred in the past before the homeowner purchased the property. The premium for title insurance is a one time fee paid when you purchase the home, and insures the property as long as an individual owns it, and may extend even after the property is sold.

Why is it Important?

The title agent compiles all of the documents associated with the property to create a “chain of title” (i.e. the history of ownership of the property). The chain of tile may reveal title hazards that need to be corrected prior to the property being sold to another purchaser. These may include an error in the legal description for the property, an outstanding tax lien against a previous owner, or a lien against the property filed by a contractor who completed work on for a previous owner but was never compensated for his services.

Chains of title may also have “hidden” defects. These can include a forged signature on a document executed by a previous owner, an unknown heir of a previous owner who is claiming ownership in the property, or a document executed on behalf of a previous owner under an expired or fraudulent power of attorney.

Title insurance offers financial protections against all title defects. Title insurance pays for defending any lawsuit which may attack an individual’s ownership in the property, as well as, pays for the costs of clearing any title defect which is preventing the owner from selling the home to a potential buyer.

To find out more about Acer Title’s services, call 703-676-3700 or visit their website at www.acertitle.com.

 

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