.Part I of this short series on real estate transactions (read it here) talked about the title to the property. We saved title insurance for Part II. It’s its own animal.
Title insurance protects the buyer and the mortgage lender in the event a future problem is found with the title. Having an experienced Wisconsin real estate attorney on board early reduces the possibility that a problem will be found later. An experienced Wisconsin real estate attorney explains the title commitment to you. Most importantly, the attorney makes sure you understand liens, easements, and deed restrictions which remain on your property after purchasing.
Forgery, Fraud, and Heirs, oh my
Title insurance insures the piece of property with regard to claims, rights, and liens against the home or property being purchased. These claims sometimes include fraudulent titles, forged signatures, undisclosed heirs to the property, or spousal claims from ex’s. When a home is in a subdivision or is a condominium, the title insurance lists all the restrictions and covenants (rules) of the subdivision or condominium.
When Wynn at Law, LLC reviews the title, we will consult with our clients so they are aware of any title issues. The insurance, by the way, is optional if the buyer isn’t financing the purchase. A policy covering the mortgager is required by every lender when a home or second home is mortgaged or refinanced.
Three take-homes from this article:
First, from a buyer’s perspective, a buyer’s or owner’s title insurance policy is recommended even if there’s no lender involved. It is worth the relatively low cost in our experience and, customarily, the seller pays for the policy. It’s peace of mind.
Second, as the first article pointed out, when Wynn at Law, LLC is involved, our title review with the client is thorough. That doesn’t eliminate the need (or requirement) for title insurance. A mortgage company is going to protect itself. More importantly, the owner’s title insurance is like the shell on an egg – many people consider the purchase of their primary home and a vacation property as the nest egg worth protecting.
Third, the real estate attorney is not the insurer and has no role in issuing the policy or recommending a carrier. The title company or the mortgager does that. Wynn at Law, LLC does review the insurer’s title commitment with you.
Image by Aleksandar Stojanov, used with permission