Why is Title Insurance SO Important?

Dun da dun da! We're going to talk about a great topic that I get asked about all the time: why do I need title insurance or owner's title insurance? And this is David Xie with the Xie Mortgage Team. When you get a loan from a lender, you are going to need lender's title insurance. And that basically protects us as the lender against any liens that we're getting ready to talk about different reasons why you need owner's title insurance.

With owner's title insurance, that kind of protects you as the buyer of the house and how it protects you is, I'm going to go over a couple different scenarios of how it protects you. So number one, there's errors and public records. As a kid, we've always played this game called telephone. And basically it could be something as simple as the sky is blue. And by the time it gets to the end of the line, well the ocean is red.

There are definitely possibilities that there could be errors on public records. And because of those errors, when you go to sell your house, if you don't have owner's title insurance, you may have to add additional expenses in order to sell your house.

Number two, there could be unknown liens from the previous owner. If you've gone through the home buying process or if you're new to this, part of the process includes maybe getting your house fixed because of home inspection repairs, or maybe termite damage underneath the house.

And because of that, there may be some mechanic liens. There could be other liens from like bills because maybe they took an exception to a title policy when they bought the house or sold the house. And that's something that the owner's title insurance will also cover.

The third thing, this is really weird, but there's definitely some illegal deeds. There could be some liens or deeds that are put upon the house that should not have been there. Like you didn't sign a documentation or form that says, Hey, I'm going to allow you to put a lien on that property. So if there's any illegal deeds, this will also protect you against that.

One of the biggest things is when you there's a will involved. When you're going through a probate or executor of the state, sometimes these documents are extremely long. It's got to read through thoroughly probably about 10, 15 times at least in order for you to fully understand it. But there may be some errors or some heirs that did not get their share. And you definitely don't want be involved in this when you go to sell your house. So this is definitely one of those reasons that you want to get owner's title insurance.

There could be some forged documents that were done that are actually recorded with a county or the city. There could be unknown easements. And an easement is basically, you may have different lines that the city has to run through. I recently financed a home where right in the middle of the house, pretty much was an easement. That was part of the survey that was detected.

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And that brings me to our next point, the boundaries and surveys. During the process of buying a home, your title company, or your attorney should be pulling title to make sure that there aren't any boundary issues or survey issues or disputes that need to be overlooked.

And finally, you may have a false impersonation of a previous owner. I myself have bought a home in the past when I thought, Hey, here are your keys. I grab the keys, I go over to the house and there's someone in the house. And this is something that because I purchased owner's title insurance, it was able to help me out.

Owner's title insurance can typically be purchased on all real property transactions, including land. I've definitely seen instances where I've had a personal friend of mine who bought a piece of land that with the boundaries and the easements. The house could not be built on that piece of land until all that was resolved.

And it was a tall task, something that took over a year to resolve. And this is something that you should not have to encounter when you're buying a home. My name is David Xie with the Xie Mortgage Team. If you have any questions or concerns on common title issues and why you should get owners title insurance, please feel free to reach out to me at (757)-478-8493.

If you want to schedule a time to talk to me, there will be a link posted below that gives you access to my calendar. I am available seven days a week, and I'd love to talk to you about this and be sure to like and subscribe to this video above and I'll talk to you later. Bye.