Do You Really Need Title Insurance When Purchasing a Property?
Real estate transactions involve many moving parts. All it takes is one problem to arise to derail the entire transaction. All that time and money you spent on the deal will quickly go up in smoke. Is there any way that you can protect yourself?
If you’re considering purchasing a property in Central or Northeastern Pennsylvania, it’s essential to protect yourself. And the best way to do that is by purchasing title insurance. But is it necessary to buy this insurance policy? What can happen if you don’t?
The real estate attorneys at Rinaldi & Poveromo are here to explain.
What is Title Insurance?
Title insurance is an insurance policy meant to protect the homeowner and the mortgage lender from any issues that could arise in a property’s ownership records.
For example, if the previous owner has a tax issue, a lien may be placed on the property. If you are purchasing that property, then there will be a delay in transferring the title until the situation is resolved. But, if you have title insurance, then the insurance carrier will pay for any financial loss you may have if you’re unable to resolve the issues with the title.
Some other common types of title issues that a title insurance policy can protect you from include:
- Illegal deeds occur when someone who is not permitted to make legal decisions tries to transfer a home’s deed to another person
- Errors in public records, such as a clerical error
- Liens on the property that are unknown at the time of the purchase
- Forged documents
- Easements by either the government or other entities
What Happens if You Don’t Have Title Insurance in PA?
As we said, title insurance protects both you and your lender from any problems you may not be aware of. When a title is being transferred to a new owner, a title professional will do a thorough inspection of that title to ensure there are no legal issues. But if an error is found, the title agent will have to work with the other party to resolve the matter before the transfer can occur. This can save you time and money.
If you have title insurance place, any legal costs or damage that accrue will then be compensated. In some scenarios, such a defective title on a foreclosed property can cost you thousands of dollars in legal fees. And with a policy in place, your insurance carrier could end up compensating you for the forfeiture of the property.
Purchasing Property? You’re Going to Need a Lawyer for That!
If you are planning to purchase a home or piece of land in Pennsylvania, it’s best to speak with a skilled real estate attorney prior to purchasing. For decades, the lawyers at Rinaldi & Poveromo have been helping both buyers and lenders with their real estate needs. We’re here to help! Contact us today for a free consultation to learn more.
