A quick course in title clearance and title insurance every homebuyer needs to read

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We live in a world where extra charges appear on bills and where we are asked to buy things we may not need. It is therefore natural to think that something as obscure as title insurance or title clearance might be some kind of frill that is just plain unnecessary. Unless you are a real estate professional, lawyer or title specialist, you may not realize the facts about protecting the title to a home you want to buy.

To understand the situation, we need to consider the history of a home. You can learn something about it yourself by doing a basic internet search. It will scratch the surface with some details about the property. But this type of research is preliminary at best and inconsequential at worst.

Many details about a home’s history are not well documented or even public. The seller might not actually own the property free and clear. Others may have legal claims that have not been resolved. A seller may not recall an ownership agreement with a family member, former spouse or children. A construction company may still be owed for work it performed. There may be irregularities in legal documents pertaining to the home. Such issues as these may fly under the radar of most do-it-yourself title searches. These are just a few potential problems that can threaten your claim to ownership and get expensive if someone complains. You need more than a shovel to uncover the truth. It takes some deeper digging. We call this digging title clearance.

“We paid for an inspection. What else could there be?”

A home inspection is important but does not get into the issues of ownership. You need a background check — of the owner of the property itself as well as the seller in relation to the property. Title companies perform that kind of title clearance service. They are in the business of helping people get all the relevant facts about the property you’re hoping to buy free and clear. For a modest fee, a title company will get a true picture of any unusual circumstances and potential land mines in the title. With the help of title insurance underwriters, title companies will get to the bottom of things to protect your rights of ownership. Then if someone surfaces with a claim and legal action, you’ll be glad you thought ahead.

Can you say no to title insurance? Perhaps. Will you live to regret the decision? Why take chances with such an important investment? Title insurance is an investment in peace of mind.