This post comes straight from Melanie Schmidt with Minnesota Title. Melanie has a wealth of knowledge when it comes to your home and title insurance, so be sure to check out their site after you read the guest blog:
1.The title company does not work for your real estate agent. We are separate companies. Sometimes people think that the title companies closer is an assistant to the realtor or part of the brokerage, this is not true. We function as a team of course but the Title Company is it’s own entity. They clear title, handle the funds and conduct the closing, acting as a 3rd party throughout the transaction.
2. You can choose your title company. And you should! If you are buying a new home, you are in charge of who does the title work and provides your title insurance. Make sure you choose a good one with a solid reputation and knowledgeable staff. One that has in-house examiners and multiple locations are some things to look for. Your realtor may recommend a few options for you and can guide you towards ones they enjoy working with, but the decision is ultimately yours.
3. Title Insurance is more important than you think. All lenders require you to have lender’s title insurance but you also need owner’s insurance. This is a one time fee that protects you for the duration of the time you own the home. Unlike home or car insurance which focus on possible future hazards, title insurance safeguards against loss from hazards and defects already existing in the past.
4. Paying all cash does NOT eliminate the need for title insurance. An all-cash transaction does not eliminate the risk posed by unknown title defects. An owner’s policy protects you against possible loss or damage from a covered title defect. A title claim could arise at any time, even after you’ve owned the property with no problems for many years. How could this happen? Someone else might have ownership rights that you don’t know about when you make an offer to buy a property. Even the current owner might not be aware that someone else has a claim on the property. In the case of an overlooked heir, even the person who has those rights might not know they have them.
5. More people use their title insurance than you think! According to the American Land Title Association, title insurance policyholders have filed over 730,600 claims to date. In 2018, the title industry spent over $615 million* defending the property rights of its policyholders and compensating their losses due to covered title defects. Ask yourself this, is a one-time payment (1-2% the cost of the home) worth it to protect the biggest investment of your life? The answer is always YES! 😊
For more information, visit Minnesota Title!
Amy Lauria, the president of Spotlight Business Solutions, has been working as a digital marketing maven since 2005.