Colony Title Associates

How Title Insurance Can Prevent a Real Estate Nightmare

The home-buying process is complicated and full of potential pitfalls. But like you, we want our customers to be happy and prosperous in your new home. Whether you run into a filing error at the county courthouse or a fraudulent seller, Colony Title Group can help you avoid some serious real estate nightmares with a good title insurance policy.

The “Second Seller” Scenario

Title insurance is a good idea to protect you from potential unknown problems with your title.

Imagine, you’re enjoying a sunny afternoon on your back porch when you receive a phone call. Your new home’s previous owner didn’t mention that their ex-spouse or distant cousin is the rightful owner — and now your real estate nightmare is a reality. If their claim is supported in court, you could end up paying for your home again or moving back into that cramped apartment you were so happy to leave. Your down payment, any principal paid and any equity you’ve accrued could simply disappear.

If the sale is ruled null and void, your lender’s title insurance will cover the bank’s court costs and reimburse the bank for the remainder of your mortgage. With an owner’s title insurance policy, your losses, attorney’s fees and court costs will also be reimbursed. You may end up having to move out, but you’ll do so with more financial security.

Bad Paperwork: Every Homebuyer’s Nightmare

When you file or request paperwork on a property with local agencies, you expect the forms to be correct. But bureaucracy has a funny way of getting hung up on itself. Things like delinquent taxes, liens and unpaid mortgages may not come up in records searches for a number of reasons. You could end up with a hefty unexpected property tax bill, a surprise second mortgage or worse.

An owner’s title insurance policy would cover your costs in these nightmare situations, whether due to fraudulent behavior by the previous owner or a clerical mishap at the county offices.

Weigh the Costs & Benefits of Title Insurance

Because an owner’s title insurance policy premium has to be paid up-front can’t be rolled into the mortgage, many homebuyers choose not to buy a policy. But on balance, the cost of an owner’s title insurance policy is negligible compared to the possibility of losing your home, down payment and principal payments (not to mention attorney’s fees, court costs and relocation costs). Owner’s title insurance could save you thousands of dollars and some serious headaches.  

About Colony Title Associates

Founded in 1995, Colony Title Group handles in excess of 2000 real estate closings in Washington DC and the Delmarva area every year. The founder Tee Tillman has over 23 years of experience in the title and real estate law fields. Colony handles closings for several lenders, including banks, credit unions and mortgage brokers.

Colony is the preferred choice for many real estate brokers in the Maryland area. If you have any questions concerning issues that Baltimore title insurance protects you from, feel free to contact us at 410 884-1160 or visit ColonyTitle.com today!

SOURCE: http://www.realtor.com/advice/buy/5-home-buying-nightmares-title-insurance-prevent/