Avoiding Title Insurance Nightmares In The Home Buying Process
If you were to receive basic level real estate service, then you would be handed a bunch of documents and an insurance binder. You would then be responsible for going through everything on your own. Unfortunately, many real estate agents like to take this approach and some agents don’t even take a second look at the documents they provide their clients.
Sure, properties that have exchanged hands in the past usually don’t have any issues with its title. However, you must be able to understand the documents you receive. Doing this will allow you to know whether or not there are issues with the title.
Knowing Whats In Your Title Binder
Your Title Binder will reveal if there are any restrictions that you may not have known when you decided to make an offer, so it’s important to have a thorough understanding of what your documents say. Things can change from the time the disclosure documents or covenants were printed. The only way you’ll know about any changes that were made since putting in the offer would be to have a look at the documents in the title insurance binder, which should include any recent documents that were recorded down at the county court. Recent filings that relate to any homeowner association will be there for the viewing, if there are any.
You might want to reconsider buying the property if you find out there are restrictions surrounding how you can use the property, and if these uses are important to you. You’ll then have to think hard about whether or not the property is worth buying. Maybe you have a vehicle that you’re going to park or you might plan on building a shed for it. If there are any restrictions set in place, a professional may be able to help you uncover those restrictions, which you may not have even noticed in the first place.
In the front of the title insurance binder is a summary of what’s included in the massive amounts of documents and this can give you a brief overview. The two sections are referred to as the ‘exceptions’ and ‘requirements’. The requirements are the things that must be done, according to the title company. These will have to be addressed or the criteria needs to be met before you get title insurance. Generally speaking, everything is straightforward, such as any liens against the property must be paid and any taxes must be paid.
In the exceptions section is where you may discover issues that can be a challenge. A lot of people are not really sure what exceptions are or what it means when they read that certain items are excepted. Title insurance protects people from threats that could pose a problem to their ownership or things like encroachments.
If there is something the courthouse has already recorded, then you will not be covered by the title company if it happens in the future. This is how covenants and restrictions work. For example, if you can’t store a recreational vehicle on your property, then you won’t be able to claim damages if you parked a recreational vehicle on your property and it became damaged.
Remember, your hard earned money is what’s at stake and it is the reason why the deal is happening in the first place. Plus, you are the customer, so feel free to ask any questions you may have about the exceptions, requirements and any other documents you receive. If there are deadlines for any objections, then feel free to have the documents examined by a professional. It is always better to have a professional read everything and explain everything to you in a way you’ll easily understand.