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Title Insurance -
      Is It Really Necessary
    

Often required
to help protect the lender . . .

    
Many of us often refer to a person who has “bought or
sold” real estate. Even in newspapers we see advertised real estate for sale, yet it is only the “title” to real estate which can be bought or sold.
 
    
Title is sometimes defined as the means whereby an owner is enabled to maintain or assert his possession
in enjoyment of property. Another definition is that title is the evidence of right which a person has to
the possession of property. As applied to the investigation of titles, the word “title” has acquired the sense
of history. Therefore, searching the title, investigating the title, and giving an opinion of title all refer to the compilation and the interpretation of the history of the title, a service performed by the title company.
The conclusions of his study into the history of real property are summarized on a policy of title insurance.

It should be remembered that title is synonymous with the words “right”, “interests,” “estate.” Such words are
used to denote the degree, quantity, nature and extent to which a person may have an interest in real estate.

An insurance policy that is written on title to real estate differs from every other form of insurance in its degree
to indemnify an insured in the event of a loss by reason of a defect or flaw of title PRIOR to the date of policy.
All other forms of insurance agree to indemnify the insured in the EVENT OF LOSS due to a FUTURE event
and after the date of the policy.

Basically, title insurance is the company’s opinion concerning the ownership and marketability of title to a
particular parcel of real property. This can only be ascertained after a thorough and complete search of all the records affecting title to the parcel insured. A title company is a service organization and performs a service for those interested in buying, selling, or loaning money on real estate. When you purchase a title insurance policy, you are buying the services of experts. The company is willing to back the opinion of these experts with the additional feature of insurance.

Title insurance, in effect, insures marketable title which is, in essence, title that a prudent man, well advised as to the fact in law, would be willing to accept.

Title insurance policies, however, do not insure against several major areas which are either too difficult or too expensive to cover, including defects in title known to the insured, easements and liens not shown by the public records, interest of parties in possession, or matters requiring an accurate survey.

When dealing with real property, title of the seller cannot be assumed. We must ascertain and then be assured that what we bargain for is in fact owned by the seller. A purchaser of real property is not satisfied with assurance that he will not be dispossessed of his property or that no adverse claim may appear to harass his quiet enjoyment of the property. Every person, when purchasing real property, wants to know that he will be able to sell, lease, or mortgage the property freely. Because there are as many interests in land as there are leaves on
a tree, a purchaser wants to be assured that his title to the land is marketable.

Title insurance is often required to protect the lender against loss if a flaw in title is not found by the title search made when the house is purchased. You may also get an owner’s policy to protect yourself. Also, attorneys provide title insurance as part of their services in examining title and providing a title opinion.

It is important to remember that a title insurance policy issued only to the lender does not protect you. Similarly, the policy issued to a prior owner, such as the person from whom you are purchasing the property, does not protect you. To protect yourself from loss because of a mistake made by the title searcher, or because of a legal defect which does not appear on the public records, you will need an owner’s policy. Such a mistake rarely occurs, but, when it does it can be financially devastating to the uninsured. When you buy an owner’s policy it is usually much less expensive if purchased simultaneously with a lender’s policy. In addition, if you are buying a home which has changed hands within the last several years, inquire at the title company that issued the previous title insurance about a “reissue rate” which could be a lower charge than the cost of a new policy.

   


About United Country

United Country Real Estate is the largest fully integrated franchise network of conventional real estate and
auction real estate professionals in the United States. Based in Kansas City, Mo., the company has been an innovator in real estate marketing since 1925. United Country supports nearly 675 offices across the U.S. and
in Costa Rica with a unique, comprehensive marketing program that includes one of the largest portfolios of property marketing web sites (more than 1,000 separate sites), seven proprietary real estate catalogs with a cumulative distribution of 1.5 million, an extensive, current buyer database and national advertising of properties to more than 90 million potential buyer prospects a week. United Country has been recognized by Dun and Bradstreet’s AllBusiness.com as the top U.S. real estate franchise, the Wall Street Journal as a top 1
percent franchise and Entrepreneur Magazine's Franchise 500® as a top 100 global franchise.

NATIONAL HEADQUARTERS
2820 NW Barry Road, Kansas City, MO 64154
816-420-6200  www.unitedcountry.com

   
    
   
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