Why is title insurance an important part of your home purchase?

On Behalf of | Jan 31, 2019 | Firm News |

You may have scoured Scottsdale for the perfect home for you and your family. Now that you have made your choice and put in an offer that the seller accepted, you want to move forward as quickly as possible so that you can move into your new home.

It doesn’t work that way, however. Numerous issues require attention before the closing. One of them is the issue of title insurance. You need it in order to provide you with protection should someone come forward at some point in the future and make a claim to your property. Before issuing the policy, the title company will conduct as thorough a search as possible.

What issues could a title search identify?

You may be surprised just how often searchers discover errors during a title search. When conducting a title search, the following issues could arise:

  • An old mortgage lien on the property may remain in the records without a release.
  • Errors in indexing or recording prior documents may have occurred.
  • Errors in the execution of prior documents could affect ownership.
  • It could turn out that someone forged certain prior documents, or that they are otherwise fraudulent.
  • A missing heir could come forward in the future if not identified upon the death of a prior owner.
  • Taxes and other assessments on the property may require payment in order to avoid or release a lien.
  • The property could have unpaid judgments or other unpaid liens on it.
  • Questions regarding the mental capacity of a deed’s grantor or grantors could arise.
  • The search may reveal that the “seller” does not actually have the legal right to sell the property.

When you entered into your purchase contract, you may have put in a contingency saying that you could walk away from the transaction if a search revealed any title defects. If so, you could exercise this option, or you could take steps to clear up any issues with the title so that you can move forward with your purchase. It is possible to cure some defects without the need for a court order.

For instance, you could contact a previously undisclosed heir to release his or her claim to the property. You could contact creditors with judgments or liens to get releases recorded. If those non-adversarial methods fail, you can file a quiet title action, requesting that the court enter an order that would clear the title. This is usually effective for clearing up typographical, recording or indexing errors as well.