When buying a home, one of the key steps in the process is the process of discovering the condition of the title to the home. Title is a legal concept that describes your bundle of rights to the home. As a homeowner, you have the right to enjoy your property, to mortgage it, to improve it, to control it, to exclude others from it, and to sell it. As your title partner, Watermark will conduct a title search, clean up any title issues we find, and issue both lender’s and owner’s title insurance policies to protect the transaction.
What Is a Title Search?
Unless you are purchasing new construction, the home you are buying likely had more than one owner. Even if you are buying vacant land, that land has had multiple owners over time. During a title search, we will determine the “chain of title” to make sure there are no obstacles for you to purchase the home. Think of this process as detective work – we will go back and look at the list of all owners of the property in chronological order, from the owner sixty years back to the current one, to uncover any potential problems that may affect YOUR ownership rights.
When we conduct a title search, we are looking for title problems that may be a roadblock during the home buying process including:
- Liens on the property, including old liens from prior owners that were never satisfied
- Unpaid property taxes or unpaid inheritance taxes
- Public record errors
- Encroachment with neighbors
- Fraudulent documents
Once we are finished with the title search, we will issue a report with our findings, known as the ‘Commitment’. If we find any issues with the title, we will work with you, your realtor, the seller’s realtor, and all parties to “clean” the title. Lenders require this crucial step and will not issue a mortgage until the title search is complete and deemed clean. After the title is clean, we will issue title insurance. There are two different types of title insurance – one for the lender, and one for the buyer.
What Is Lender's Title Insurance?
The lender’s title insurance policy is designed to protect the lender if there is an issue after closing that causes the buyer to lose the house in a property dispute. The lender’s title insurance will cover the loan amount in full, and the lender will get their money back.
It’s important to realize that lender’s title insurance only protects the lender, and it does not protect the buyer. That is where owner’s title insurance is beneficial.
What Is Owner's Title Insurance?
Owner’s title insurance protects your right to your home. By searching, clearing, and insuring the title to your home before you buy it, your owner’s title policy offers protection for your property rights for as long as you and your heirs own your home. If legal ownership of your property ever comes into question, an owner’s title insurance policy protects you from expensive legal problems that could result in the loss of your home.
As property changes hands, mistakes and irregularities — often made long before you expressed interest in the property — can place your ownership in dispute. A seller may have:
- Fraudulently claimed to be the sole owner
- Avoided disclosure of using the property as collateral for an unpaid loan, or
- Failed to pay real estate taxes
Even a simple mistake in the recording of legal documents with the recorder of deeds office, improper execution of legal instruments, or the reappearance of undisclosed or missing heirs can result in the loss of your home.
Title Insurance will protect you against the financial loss associated with these issues and many more.
Watermark Land Transfer, a full-service title insurance company, is ready to help you with your title search and lender’s and owner’s title insurance. As a consumer, you have the right to choose your real estate settlement partner. Reach out to us today to get a quote for title insurance to protect your property.
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Watermark Land Transfer provides residents of York, PA and surrounding areas expert title insurance, settlement, closing and notary services.
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