Real estate agents are a valuable piece of the puzzle when it comes to educating buyers about the importance of title insurance. While most agents know that this insurance is vital to protecting the ownership of the home, many still cling to some pervasive myths about title insurance.
Myth: Title Insurance Doesn’t Offer Much Protection
Every policy is required to clearly state what coverage entails, so there is no deception on behalf of insurance companies. Depending on which title company your client chooses to go with, different levels and types of coverage are available. Some of the most common types of protection offered include pre-existing issues like forgery on documents, liens, deed errors, easements, survey disputes, adverse possession and undisclosed heirs.
Myth: Policies Cost Too Much
Title insurance is reasonably priced, and it only makes up a small fraction of closing costs. Your clients can always receive complimentary quotes from Homeland Title and more information about exactly what this insurance offers. It’s also important to keep in mind that the policy’s cost is miniscule compared to the cost of potentially losing a home due to a title dispute. Title insurance policies will cover the cost of your legal fees in the event that a claim is made against the home’s title, which can easily add up to tens of thousands of dollars.
Myth: Policies Will Be Carried Over from the Seller
Some homebuyers mistakenly think that the previous owner’s policy will also cover them after the sale. In reality, every time the home changes custody to a new owner, a new title insurance policy must be procured. However, unlike homeowner’s insurance, you only need to pay for the policy once, and you will be covered for the entire time you occupy and own the home.
Myth: Title Insurance Is Required
While title insurance is a great idea for every home buyer, it is not legally required. Many lenders require the buyer to purchase a lender’s policy, but an owner’s policy is never mandated. According to the American Land Title Association, a whopping 25% of properties have a title defect that should be addressed before closing. These defects are most frequently found during a title search as part of the title insurance process. While it might not be required, it is definitely heavily recommended.
Title Insurance from Homeland Title & Escrow
Homeland Title & Escrow offers a broad range of title services, including complimentary consultations for first-time homebuyers. To learn more about our services, give us a call at (410) 544-6700.