Title Insurance


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Some men are born to live at ease, doing what they please, richer than the bees are in honey… the rest of us have to work for a living!

Buying a home is for many of us the largest purchase we’ll ever make. It takes a lot of hard work to afford to live where we live, but we get the benefit of shelter-a place to gather, a place to rest and play, and a safe place to raise our children. A home is a very costly part of our lives, and a very beneficial part.

Hard earned homes can be compromised if a title claim is made against the property. Even if that claim is illegitimate, the homeowner has to defend his title in a court of law. Litigation expense can exceed the property value, making a legal defense cost prohibitive.

However, title insurance can help a homeowner protect his purchase. At a fraction of the cost to hire an attorney, a title insurance policy pays court costs to defend the homeowner’s ownership.

Protect your purchase with title insurance, then all is not lost in the event of a claim or challenge. A title insurance policy is something I hope you’ll never use, but if you need it, it is all for the best.

Land Title of AmericaALL FOR THE BEST
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Owner’s Title Insurance is like a pre-written alternative ending to avoid misfortune. The happily-ever-after of home ownership should be hassle-free. You should be able to own your home and sell your home without any question of your entitlement. You paid for the house-heck, it’s your home-and you should have the right to live there and sell “there”… but life doesn’t always have a fairytale ending.

Sometimes the wicked stepchild of the previous owner comes back to claim her inheritance…and sometimes the next-door-ogre snatches a yard of your yard for his compost heap…and sometimes a courthouse clerk misfiles an earlier deed to your property…and then there’s fraud.

Court costs to defend your property rights can pile up higher than your neighbor’s compost. And they stink if you have to pay them yourself. However, for a one-time fee for owner’s title insurance, you can have an all-time alternative ending should someone make a claim against your land.

A title insurance policy cannot prevent a property dispute, but it can provide financial protection should an ownership challenge arise. Owner’s title insurance pays for the legal defense of your title-it pays for attorney’s billable hours and filing fees and other court costs associated with the matter… If that doesn’t work, then title insurance pays the amount insured.

Title insurance is a two-for-one deal-you get two endings for the price of a one-time fee at closing. If someone should challenge your ownership rights to your property, you either get your legal defense and you get to keep your house, or you get your legal defense and you get the policy amount so you can buy a new home (hey, not what we want, but sometimes we have Mr. Grimm writing the fairytale).

A title claim is not a win-win situation, but with title insurance, you can have an ending different from lose your house, lose all your money.

The expense of title insurance is only “once upon a time” at closing, and it brings you peace of mind for your “happily-ever-after”.

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If you can afford a house, you cannot not afford to get title insurance. Does that make any sense? What I’m trying to say is that no risk is acceptable if it is avoidable. Risk of financial devastation due to property disputes is avoidable with title insurance.

If there were a mud puddle, would you step in it? Well, if you’re my son, Sterling, you’d not only step in it-you would dive in it! But I wouldn’t step in it, not with your good shoes! Homeowners avoid obvious ownership problems by getting a title search and a survey done before they buy, then they can deal with any questions of boundary lines and ownership entitlement ahead of time.

But some problems you can’t see coming. Some title issues hide in courthouse records, some linger in deeds that never got recorded, some wait with heirs who can procrastinate in making their claims, and every now and then, you get a case of flat out fraud. You can’t see these kinds of things coming, but what you can do is minimize your financial exposure and risk to them with title insurance.

Why spend big money on a lawsuit when you could buy title insurance for a nominal one-time fee? Have you priced attorneys lately? You’re not likely to get a Groupon.

A lawsuit can range in the upwards tens of thousands of dollars… and keep in mind you could still lose your house after fighting for your ownership rights in court. Title insurance, on the other hand, generally costs a few hundred dollars, depending on the value of the property. That’s why I say if you can afford a house, you cannot not afford title insurance-it’s bad English to use a double negative, but it’s worse English if you spend all your money on your legal defense and lose anyway. That’s a double negative!

Like I said, for a few hundred dollars you can buy a title insurance policy that pays for the legal defense of your title, and will pay out the policy amount should that defense fail.

Obviously you don’t want to lose your house in a property title dispute, but you really don’t want to lose it if you’ve paid all your savings, your retirement and your kids’ college fund on the legal defense – then you’ve lost your home and all your money. Cardboard boxes are cheap, but they lack ambiance.

Instead of the double negative, let’s rephrase this issue with a double positive: if you can afford a house, you can afford the title insurance to go with it, then you’re covered in court costs and policy amount of your house, should you need it. Get title insurance and avoid double negatives.

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Gladys Mae knew the art of worry. She worried about her husband’s gallbladder, the price of gasoline, and if clothes on her clothesline could be seen from her neighbor’s yard, especially when she washed her girdle. The one thing Glady’s Mae did not worry about was her property title. Glady’s knew that she and her husband, George, owned that house and had the rightful authority to live in it… or to sell it or will it or gift it as they wished.

Oh sure, property disputes could happen—Gladys didn’t deny that, but she didn’t worry about it either. She didn’t worry about her home ownership title because she and George had title insurance.

Title insurance is peace of mind, assuring your financial protection if someone claims that all or part of your property is theirs.

Gladys Mae had worry beads and stones worn smooth from handling, but she didn’t waste these on her home title. If Mr. Huckleberry next door was going to claim part of her clothesline ran across his property, why then she would just call up her title insurance company and have them deal with Mr. Huckleberry… though she might dry her girdles indoors. If some other joker came to the front door and said he owned the whole lot, then he too would have to take up his challenge with her title insurance company.

Gladys Mae didn’t worry about title claims against her ownership because she had title insurance to fight the battles for her in court, and to pay for the related legal fees. She did not waste her time worrying about title claims… she had better things to worry about!

Land Title of AmericaTHE ART OF WORRY
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So you’ve inherited real estate with your brother. He’s willing to sell you his half of the estate. He’s family. You pay him in cash. So now what do you do? You get him to sign a deed, right? It’s just a deed, you can type it up, there’s forms online, why go to an attorney to have him type it up (and knowing attorneys, they’re going to talk you into getting title insurance), he’s family, what can go wrong?

So you are about to take a shortcut on Real Estate Title, let me share a little story. Once upon a time—no, scratch that, this is no fairytale. Unfortunately what I’m telling you is a true story in Florida. The names have been changed, but the situation is real and ongoing.

This story begins with a set of grandparents. Let’s call them Bob and Sally. Sally died, leaving the house to Bob, and then Bob died shortly thereafter. Bob had a will that left the house to Bob’s son and daughter, we’ll call them Jack and Jill. Seems simple enough, but wait-there’s more.

Jill had agreed previously to purchase all of Jack’s interest in their father’s (Bob’s) estate. Because Jack was her brother, a handshake and a hug was all they had to solidify their agreement. They would take care of the legal paperwork later. “We’re family, what could go wrong?” she said. Some months later, Jack unexpectedly becomes ill and goes into the hospital.

Shortly thereafter, Jack dies.

Jill decides to sell the property, and then realizes in order to get this property in her name so she can sell it, she is now going to have to pay for a probate—penny-wise dollar-foolish! When the probate was complete, Jill was designated as the personal representative and Jack’s wife and her two children would get Jack’s share of the money for the sale of the home.

So Jill lists the property and finds a buyer.

The buyer insists on getting title insurance so a title search was ordered. Title search came back squeaky clean and closing was set. A simple happy ending to what could have been a very complicated situation, except for, prior to closing, a young lady by the name of Jackie surfaces and claims to be the biological daughter of Jack. Talk about sliding home and missing the plate entirely!

Right / Wrong / or Indifferent-it doesn’t matter! Jackie felt that she had rights to seek financial interests in her father’s estate.

Had this closed and Title Insurance issued ( thank heavens it didn’t!), we would have paid a Title Claim to the Biological Child either in legal fees incurred to defend the title, or given her the money she needed to make her go away.

Did the Title Examiner miss something?

No. No matter how many times you look at the Title Search, you can’t see what’s not there.

Was it the Probate Attorney’s fault for not asking about other heirs?

In the end, it doesn’t matter! If you are the Owner, you are stuck with the problem!

I don’t care how many times you look at a Title Search and the Title Search looks great, you can still have problems for things not recorded in the public records. Shortcuts on real estate title can bring unnecessary hardship on you and your family.

Whenever you take title to real estate, get title insurance, no matter if you’re inheriting a piece of property, someone gives it to you, no matter if it comes from your pastor, your brother, your father, your best friend, your son’s wet nurse—crap happens! Unless you’re independently wealthy and have a slush fund with my brother, Rusty’s name on it (he’s an attorney by the way) get title insurance.

This is story 283 in my book of 1001 reasons to get title insurance.

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A sower went to buy a field. To decide which field to buy, he took some seed and went forth to sow. Some seeds fell by the wayside and the birds devoured them. Some fell upon rocky soil where they had no roots and they withered and died. And some seeds fell among the weeds and the weeds choked them. But other seeds fell into good soil and brought forth fruit a hundredfold! Thus the sower went and soldeth all that he had to buy the field with good soil. And he bought title insurance to go along with the property.

The sower became a very wealthy man indeed from the harvest of his field with good soil, and soon he had neighbors on every side, but these neighbors were not wise men. One had bought the field by the wayside, and he had no luck at all. Another had bought the rocky field and was very hopeful when the plants first sprang up, but then he was crestfallen when they withered and died. And another man had bought the field of weeds.

A wicked envy arose around the sower’s success. The three unwise neighbors conspired to take his field. The man who owned the wayside claimed that the property survey was incorrect and that one-third of the sower’s field was actually on his land. The man on rocky soil claimed his late grandmother had left one-third of the sower’s field to him. And the man with the weed patch claimed that one-third of the sower’s field was his easement. In this way, the three unwise men planned to divide the sower’s field amongst them. They would not only get his land, but would break the sower of his wealth as he tried to defend his ownership in a court of law.

The sower listened to their claims…and then he unfolded a lawyer from his title insurance policy. The sower’s title insurance provided legal representation in defense of his land ownership rights, and in so doing, protected his financial interest in the property. Because that policy covered legal fees, the sower did not have to ply his wealth in court costs regarding these property challenges.

In the end, the neighbors could not withstand the legal battles they had waged. The one by the wayside hit the road. The one on the rocky ground started a band. And the third got busted for his weed. The wise sower who had title insurance to financially protect his field of good soil continued to reap a wealthy harvest, and he lived and worked carefree of property disputes.

The sower who had title insurance on his good soil reaped a wealthy harvest regardless of property disputes. http://bit.ly/Sower_and_Title_Insurance

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Purchasing title endorsements is not like ordering a side of fries. Title endorsements close the gap between your title insurance policy and the exceptions and exclusions of that policy. For instance, title insurance does not cover covenants and restrictions violations, mineral issues, easements, abusive association, challenges against condominium declarations, and the list goes on. That’s where title endorsements come in.

Title endorsements aren’t for wishes—they’re for needs. Title endorsements allow you to customize your title insurance to meet your specific needs.

Proper title insurance coverage means having proper title endorsements. Your title insurance isn’t going to do much good if it only goes as far as the monumental exceptions, like the eight foot utility easement that runs right through your house.

You could probably scrape together enough cash in your car to get a side of fries, but it’ll cost you a lot more on a title claim if you don’t have proper title insurance with proper endorsements. Title endorsements are a very inexpensive way to cover some very real issues that can be very expensive.

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$10,000 QUESTION

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What would you do with $10,000? Was your first answer: “Pay legal fees for a lawsuit I could have prevented for a nano-fraction that amount?”

For a one-time fee at closing, you can buy Title Insurance that covers legal costs relating to ownership disputes on your property.

Sure, title claims don’t happen every day in your life, but they do happen every day, but they can wreck your whole week if they do. More realistically, Title Insurance prevents months of worry about how to par for legal defense of your ownership title.

Don’t waste your money-spend it wisely. The small cost of Title Insurance can prevent a giant expense in legal fees.

What would you do with $10,000? Leave us a comment below and let us know.

Land Title of America$10,000 QUESTION
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In 1980 a man and a woman purchased property. They were married when they bought it, but did not put that on the deed. The husband died. He had six children from a previous marriage and the wife had one daughter from a previous marriage, and the daughter had Power of Attorney for her mom. The wife sold the property to a family friend, a contract for deed, but it was unrecorded. The arrangement was in writing, but without witnesses or notary. Then the wife died. You cannot make up stories like this– they can only happen in real life real estate!

To recap, the man and woman took title without putting their marital status on deed. The man died. The woman sold the home. In 2004, the family friend that bought the home paid it off, but was it conveyed properly? The woman passed away. What about the six children from the man- do they need to be notified?

We’re talking about a mobile home in a more challenged area and the family didn’t have the money to pay the doc stamps on the deed. It costs money to put things in public records. They did the best they could but they didn’t have the resources.

There are a lot of issues going on here- a lot of muddy water. Yeah, everything can be fixed- it’s going to take an attorney and some money, but it can be fixed- but are you willing to buy that property without some kind of financial protection?

With that many issues, there’s a lot of looming risk. If you’re going to buy the property, you take on that risk. It might be a great deal, but only if you don’t have to hire a lawyers yourself. Seriously, this is why you get title insurance- to cover the legal defense of your property ownership and to give you financial protection and assurance should there be a valid claim. Again, that is a true story.

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With a Warranty Deed, the grantor fully warrants the title to the said land, and will defend the same against lawful claims of all persons whomsoever. You don’t get that with a Quit Claim Deed.

When someone deeds interest in a property via Quit Claim, he conveys or gives all interest he has IF ANY

. What if he doesn’t have any interest in that property? A Quit Claim Deed provides no warranties. DON’T DO IT.

Furthermore, because Quit Claim Deeds carry no warranties, they void title insurance policies. Yeah, so not only do you have no warranty on the deed, you also have no insurance to protect you from financial loss should someone challenge your ownership of the property.

A Quit Claim Deed is a great way to “clean up” title, but it doesn’t guarantee anything. It can also be a conduit for fraud, and you really don’t want to be on that end of the stick.

With very few exceptions, always get a WARRANTY DEED instead of a Quit Claim Deed.

Land Title of America“IF ANY”- QUIT CLAIM DEEDS
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