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  • Writer's pictureBy: Jacqueline Goralczyk, Esq.

Two Minutes On Title


Title insurance can be a very confusing topic for both new and seasoned buyers. Title insurance is unlike other types of insurance because it protects you retroactively from events that you may not be able to anticipate. For instance, an open mortgage from a previous owner, a judgment against someone in the chain of title, or an estate that may not have been probated correctly.

When you’re purchasing a new piece of real estate, keeping a tight budget can be important. However, it is a good idea to keep that owner’s title insurance as a line item in that budget. A claim to the title of your new property may never come up, but if one does, it can be expensive and time consuming. Owner’s title insurance provides a level of security that if a claim arises in the future, the title company will defend your interest in the property, protect your investment and even reimburse you for losses suffered as a result of that title issue.

One common misconception about title insurance is that it’s not necessary for new construction properties. Most people think “it’s a brand-new home, I am the first owner, no need for title insurance because no one else could have a claim.” Wrong! New construction sometimes can pose a greater risk than existing homes.

Title insurance deals with ownership of the land as well as its improvements. So, what once was a large vacant lot, could have been subdivided, sold, resold, mortgaged etc. numerous times before it ever become the lot on which your beautiful new home sits. That means there are a lot of variables that could potentially lead to a title claim and that is the reason that it would be prudent to purchase an owner’s title insurance policy at closing. In that case the adage, “a pinch of prevention is worth a pound of cure” could ring true.

Buying a new piece of real estate should be an exciting experience. Mark Twain once said, “buy land, they’re not making it anymore.” If he were alive today, I’m sure he would also say to insure it!

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