June 2025
Title insurance is a crucial part of real estate transactions, whether you’re buying or selling a home. It protects both buyers and lenders from potential legal issues related to the ownership of the property. Here’s why it’s important:
For Buyers:
- Protects Against Ownership Disputes – Ensures that no one else has a legal claim to the property, such as undisclosed heirs, forged documents, or fraud.
- Covers Title Defects – Identifies and protects against issues like unpaid liens, errors in public records, or legal complications from previous owners.
- One-Time Cost, Lifelong Protection – Unlike other types of insurance, title insurance requires only a one-time premium at closing and lasts as long as you own the property.
- Legal Defense Coverage – If someone challenges your ownership, the title insurance company will cover legal fees and costs associated with defending your title.
For Sellers:
- Ensures a Smooth Transaction – A clear title reassures buyers and prevents last-minute delays or disputes.
- Reduces Legal Risks – Protects against past errors, such as misfiled documents or overlooked liens, that could impact the sale.
- Increases Marketability – Having title insurance in place reassures buyers that the property has a clear history, making it more attractive.
Lenders require lender’s title insurance to protect their interest in the property until the mortgage is paid off. However, buyers should also purchase owner’s title insurance for their own protection.
Title insurance is an essential safeguard when buying or selling a home. It provides peace of mind, financial protection, and ensures a smooth closing process. Without it, buyers and sellers could face costly legal battles and potential loss of property rights.