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Why Do I Need Title Insurance?


We often get questions from First Time Home Buyers in the Lake Norman Real Estate area, and “Why Do I Need Title Insurance” is one of the most common. Today, in our series, First Time HomeBuyers: Need-to-Knows, we are going to address this very important question.


Buying a home can be a very confusing process, whether you are a first time homebuyer or you have purchased many homes. As the local area Lake Norman experts, we know there are so many legal terms thrown around the negotiating and closing table, buyers and sellers alike need to have some basic information on hand.


The title to your home is basically the legal way of saying you own the right to use that property. The title allows you to access the land and potentially modify it as you see fit. Your title also means you can transfer interest in that property to others (sell it). The title is not the same thing as a deed, as the deed is what you get when you own the property outright.


When you purchase a home, whether it’s in the Lake Norman Real Estate market, or any other market, the only information you have to go on is what the seller tells you, and the only information they have to go on is from the person they purchased the property from, and so on, and so on, and so on. Because you and your lender are basically in the dark as to the history of your property, a Title Company is paid to do an historical search related to the legal ownership of that property.


What the Title Company (And Title Insurance) Does For You

Title companies work to assure you, as the new owner, that the title to your property is clear. Here are just a few defects that could come up in a title search:

*Forged Signatures
*Errors in public records
*Undisclosed or missing heirs
*Liens for unpaid taxes
*Mistakes in recorded legal documents
*Unprobated wills
*Deeds from minors
*Errors in reports from tax officials
*Failure of spouses to join in conveyances


After a thorough search, the title company will issue two title insurance policies. One, the buyer purchases for the lender, which is required for all mortgages. The other is purchased by the seller, for the buyer, as a way of assuring them their title is clear.


Title insurance defends you and your lender in a lawsuit attacking your title and either corrects the title problem or pays for your losses. It also protects you after you sell the property for any defects that may have occurred prior to you owning the property.


As you can see, a title insurance policy is critical to you as a homeowner. Stay tuned for more in our series, First Time Homebuyers: Need to Knows. We are THE Lake Norman Real Estate experts. We have been local to this area for generations and can help you take the unnecessary stress out of first time home buying. Trust your first experience to the experts at Cloninger Properties.

Keeping it real,

The Cloninger Properties Team


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