The Bottom Line is You Really Need Title Insurance

The Bottom Line is You Really Need Title Insurance

No doubt you’re about to make the most extravagant purchases of your lifetime. In fact, for a moment consider this. Buying real estate is more than dipping into savings. For most, it’s a big time investment. As a matter of course, you need to make sure you’ve covered all of your bases. The truth is that title insurance is a necessity that can save you when you least expect it.

All things considered, your mortgage lenders will most certainly require title insurance as one of the conditions of their loan. Think about it. If you finance a used or new vehicle, the bank or credit company has similar expectations. At the very least, you’ll be instructed to show proof that you have a liability policy in place.

Often, the problem with a failure to purchase title insurance comes with cash transactions. It may be that you are buying a fixer-upper at a low price and don’t see the value in paying out extra funds. Of course, this includes whether you intend to take up residence yourself – or make the necessary improvements and put it up for resale.

The bottom line is that you really need title insurance. Otherwise, your dream transaction could turn into a nightmare that keeps you awake all night.

Title Insurance: How It Protects You

To understand what title insurance really is, you may want to take a look at the Pennsylvania law that deals with it – as defined in 40 P.S. § 910-1 of the Pennsylvania statutes. Essentially, title insurance insures, indemnifies, or serves as a guarantee that properties are not encumbered by liens or hampered by defects that would affect the property’s marketability. Title insurance also acts to confirm the validity of searches done regarding the title as it stands.

All types of issues can kick in when it comes to the assumption of title. For example, the previous owner may have a construction lien against the property you purchased. If this wasn’t picked up in a title search, you could have issues down the line. The title insurance company could ultimately be responsible for missing the headaches you’re about to assume.

When it comes down to it, the important thing is protecting your investment. That’s why mortgage lenders are so insistent that you take out a policy, as they many times own a more significant portion of your property until you are well into repaying on your loan. In addition to guarding against defects and liens, here are some other ways that title insurance may give you peace of mind:

  • Building Permit Violations
  • Improper Subdivisions
  • Anomalies concerning Restrictive Covenants
  • Zoning Code Issues

In the meantime, these are just some examples concerning the necessity for title insurance when purchasing real property. Although neighboring states such as New Jersey often use attorneys for real estate attorneys for residential closings, this is not always the case in Pennsylvania.

Truth be told, many times, title companies generally prepare the final paperwork associated with buying and closing property in the Keystone state. Ultimately, you may need the assistance of an experienced real estate attorney to put things in order.

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At Mazzoni Valvano Szewczyk & Karam, we are experienced in both the transactional and litigation aspects of real estate law. Have questions? We’re happy to help you. Give us a call to learn more.

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