What Is Title Insurance & Why Do You Need It?
If you’re in the process of buying a home, you may be feeling overwhelmed by all of the fees that you need to pay before closing on the property. In addition to your down payment, you’ll likely need to pay lender fees, property taxes, appraisal fees—the list goes on and on. With that in mind, you may be questioning whether you should invest in owner’s title insurance, since that’s generally optional for buyers. Below, we explain what title insurance is and why it’s a smart idea to purchase a policy.
What Is Title Insurance?
When you close on your new home, the title for the property will transfer from the seller to you, thereby making you the official owner. Title insurance protects you from any financial losses that you could potentially sustain due to title defects. For example, your title could be defective if:
- There are outstanding judgments or liens on the property (e.g., a contractor claims they weren’t paid for work they completed on the home prior to the sale).
- There are back taxes or assessments owed on the property.
- Someone proves that they had a stake in the property and that the home was sold without their knowledge or permission.
- The public records are flawed (e.g., they contain incorrect signatures).
- The seller forged documents or otherwise committed fraud.
Title insurance terms can vary, so it’s important to understand exactly what your policy covers. With that said, title insurance will likely protect you if you encounter any of the problems listed above, paying any required compensation to the wronged parties and reimbursing you for your resulting legal fees. Notably, unlike other types of insurance that require monthly payments, title insurance typically requires only a one-time premium, which is paid at the closing.
Your Source for Title Insurance in Tampa Bay
Now that you know what title insurance is and why you need it, the next step will be finding a title underwriter to issue you a policy. Many buyers assume that they need to partner with a title company, but that’s actually not true—Florida allows attorneys to serve as title underwriters, meaning that they can issue title insurance and hold escrow. Florida even sets title insurance rates by statute, so attorneys don’t have the option to charge more than title companies. Plus, unlike standard title companies, attorneys are also able to represent buyers in negotiations, provide legal advice, and prepare supplemental legal documents (e.g., contract amendments, occupancy agreements, and bills of sale for personal property).
If you’re in Pasco County, Hernando County, or another area of Tampa Bay, you can turn to The Lyons Law Group, P.A., for title insurance. Our firm has been in business since 2008, and we have extensive experience representing clients in real estate closings. Contact us today to schedule a free initial consultation at either of our two offices—we have locations in New Port Richey, FL, and Spring Hill, FL, for our clients’ convenience. And in the meantime, be sure to check out our buyer cost sheet calculator, which can help you determine how much you’ll need to bring to your closing for title insurance and other fees.
