One of the most valuable forms of wealth in a traditional sense, real estate, is an asset protected by innumerable laws created to protect that precious ownership. The sellers of a property, in addition to the sellers’ family and their heirs, have rights when it comes to the property that a buyer is purchasing.
If the property in question is sold to a buyer without them being fully cognizant of any potential interest or liens (from the government, IRS, vendors, lenders, judgment creditors, etc.), these rights or claims will remain attached to title of the property until they are resolved or terminated.
Title insurance is unusual in comparison to the majority of other kinds of insurance due to the fact that it provides protection against future claims and losses due to defects in title that stem from an event that occurred in the past. Typically, insurance is utilized to provide coverage for the insured against a future loss caused by a future event.
It is absolutely imperative when purchasing real estate for a buyer to obtain clear title to a property. Primarily, the buyer must be informed of any and all current rights and/or claims that could potentially threaten a buyer’s possession and title of the property in question. Title insurance provides a solution to this dilemma.
By having a title company perform a meticulous investigation into the public documentation of the property, it can be assessed whether there are any rights/claims that could have an effect on the title. Items such as unpaid mortgages, taxes, judgments, and liens against present or past owners, easements, and restrictions will be reported to a buyer before the purchase is finalized.
The buyer is then fully informed and can either accept conditions or resolve them prior to close of escrow. Furthermore, a buyer will be protected against any defect, lien, or encumbrance that may be unreported as long as it remains within the scope of the title policy coverage. Hidden risks not uncovered in public records (forgery, incompetency/incapacity, fraud, etc.) that may arise once the property has already been purchased are also covered by title insurance.
Do not hesitate to contact me directly regarding any questions you may have regarding title insurance and how to take the appropriate precautions prior to purchasing real estate in Napa Valley.