Investment Protection in One Simple Step
A very important task of any real estate investor is to perform the necessary due diligence prior to purchase. As investors we want to buy down risk. One of these tasks it to perform a title search on the property. Investment protection is a paramount requirement.
With respect to real estate, “title” refers to legal ownership of property. Title insurance is designed to protect a property owner from unknown claims against a property that could arise after purchase. Should a defect in the title surface, the title insurance company would be liable to the policyholder’s loss up to the amount of the policy.
Typically the title insurance company is not the actual insurance company. They are the facilitator in issuing the policy.
Property owners put investment protection such as insurance in place to cover themselves in the event something unexpected happens. Simple Acquisitions ensures title insurance is purchased for every property we acquire. Going without is just not an option. Some of the more common title issues that arise include the following:
- Foreclosure Mistakes: Improper title transfer
- Forgery and/or Fraud: Fraudulent execution of a document
- Wills in the Chain of Title: A mistake during the probate process for a previous owner
- Incorrect Legal Descriptions: Errors in the description of a property.
- Problems with Public Records or Surveys: Improper recording of claims or tax data
- Existing Liens: Mechanics, utility, federal & even state tax liens incurred from previous owners
- Third party claim 3rd party claim of interest in your property
- Zoning by-laws Violations: Easements, right of way etc.
Bottom line, as investors we need investment protection. We need to have an accurate and legal title policy in hand when we purchase a property. The title company reviews title, issues insurance policies and files and records paperwork in the local country land records office. They can also be the closing agents and act as escrow officers for real estate transactions. This makes them a multi-tasking power team member.
Unlike other types of insurance, such as car or life insurance, title insurance only requires a onetime premium. It also insures back in time, not forward. The payment is paid at closing and it insures the insured through the duration of his ownership of the property. It’s a small price to pay to ensure your property title is free and clear of any issues/liens.
It’s important to choose an experienced title company. It can be the difference between a complicated and bumpy closing vs. a smooth and quick closing.
As you can see, the Title Company is another professional that we add to our real estate power team. If you want to learn how getting involved in real estate can benefit you, get in touch with us.