We are frequently asked questions about title insurance, especially in private and intra-family sales, and if the same is warranted. Let’s take a dive into what title insurance is, and what it protects.
What Is Title Insurance and Why Is It Important?
When buying or selling a home, including in high demand and high-value areas such as Newport Beach or Costa Mesa, understanding title insurance is crucial. Title insurance protects your legal ownership of the property, including rights of occupancy, use, control, and eventual sale. Whether you’re a first-time buyer or a seasoned investor, securing title insurance ensures peace of mind in your real estate transaction.
Why Is Transferring Property Title Different?
Transferring property is more complex than transferring personal items like a car. Unlike movable items, land is permanent, and its usage rights can evolve over time. Title insurance safeguards against unforeseen complications in the property’s ownership history such as a long lost cousin of a prior owner claiming it was his inheritance!
The Role of a Title Search
Before issuing a policy, a thorough title search is conducted. This involves reviewing public and historical records to identify any issues affecting the property. Title companies use advanced databases to ensure all potential defects are uncovered and addressed before closing.
Who Needs Title Insurance?
Both buyers and lenders benefit from title insurance (most lenders will require title insurance as a condition of the loan). Buyers want to ensure their property is free from claims, while lenders require assurance that their financial interest is secure. Sellers also gain confidence knowing they’re passing clear title to the buyer and thus minimize risks of being dragged into future litigation.
What Does Title Insurance Cover?
Title insurance protects against claims like:
- Undisclosed liens
- Disputed property boundaries
- Easements affecting access
- Fraudulent deeds or transfers
For example, someone might claim they have a right to cross your land due to an old easement, or a past owner’s unresolved debt might result in a lien against the property. Title insurance provides legal defense and financial protection in such scenarios.
Cost and Types of Policies
Title insurance involves a one-time premium paid at closing, with no recurring payments. There are two main types of policies:
- Owner’s Policy: Protects the homebuyer for as long as they or their heirs own the property.
- Lender’s Policy: Ensures the lender’s interest is prioritized over other claims.
The Low Probability of Claims
While the chance of needing title insurance is low, its value lies in the thorough title examination process. If a covered claim arises, the legal defense alone often exceeds the one-time premium cost. This makes title insurance a critical investment for homeowners in Newport Beach and Costa Mesa.
Why You Need Title Insurance Even for Familiar Sellers
Even if you’re buying from someone you trust, such as a family member, title insurance can be essential. Life changes—such as divorces, estate adjustments, or financial setbacks—can affect a property’s title. Additionally, some issues may be unknown even to the current owner such as liens or judgments or old debts. Title insurance provides a safeguard against these uncertainties.
Choose Lucas Real Estate for Your Newport Beach and Costa Mesa Transactions
At Lucas Real Estate, we specialize in helping clients navigate the complexities of real estate transactions, including securing title insurance. Our expertise in Newport Beach and Costa Mesa ensures your investment is protected. Contact us today to learn more about how title insurance can give you peace of mind during your property journey.
Contact Lucas Real Estate Today
If you’re preparing to sell property in Newport Beach, Costa Mesa, or nearby communities like Huntington Beach or Laguna Beach, trust Lucas Real Estate to handle your transaction with precision and professionalism. From understanding disclosure exemptions to fulfilling your obligations, we ensure a smooth and compliant sale.
For more insights and professional real estate services in Newport Beach, Costa Mesa, and the coastal areas of Orange County, contact Lucas Real Estate today. Let us guide you through your next property transaction with confidence and clarity.
Contact us anytime via phone (949-478-1623) or email ([email protected])
Lucas Real Estate – Your Partner in Luxury Real Estate and Legal Guidance in Newport Beach and Coastal Orange County
– Devin Lucas
Author Devin R. Lucas is Real Estate Professional – a Real Estate Attorney, Broker and REALTOR® – specializing in Newport Beach, Costa Mesa and Orange County coastal communities, serving individuals and Trustees in residential real estate.
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Source: Lawyer’s Title. https://page.fnf.com/rs/393-REY-847/images/2023-05-Title%20Insurance%20What%20Is%20It-Flyer.pdf
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