Title insurance works to protect an individual’s financial interest in a property he or she is purchasing. Many people mistakenly believe that holding a deed proves that they are the sole owner with all rights to the property, but this is not the case. A deed merely shows that land ownership rights have transferred hands. In addition to your deed, it is a possibility that there are other claims or liens on the title. By purchasing title insurance, a new buyer prevents losses and eliminates potential risks caused by defects in the property title.
When you purchase title insurance, the insurance company spends hours upon hours combing through public records prior to completing the purchase of the property. In most cases, all problems are brought to the surface and can be resolved. However, there are cases where issues remain hidden in the title of the land for sale in your area. The following are some examples of problems that could occur on your land as they may or may not be included in public records:
- Rights held by other parties to the air above the land or minerals below the land
- Liens or other restrictions, such as unpaid taxes or mortgage
- Judgment against the seller
- Undisclosed heir to the land may suddenly appear
- Clerical errors
If you have title insurance, you will be defended in any lawsuit against the title up to the amount defined in your insurance policy.
There are two types of title insurance:
Lender’s Title Insurance
Lender’s insurance protects the loan institution that may use the property as collateral if the buyer is unable to make payments.
Owner’s Title Insurance
Owner’s title insurance is what you, the buyer, will be concerned with. The insurance policy typically is issued in the same amount of the purchase price of the property. You will pay a one-time fee when you close the sale and the insurance policy will remain in effect for the duration of your interest in the property. This will put you at ease knowing that the insurance company will pay any potential claims against the title as well as legal defense if needed.
When purchasing land for sale in your desired area, we recommend that you consider title insurance to ensure that your financial interests are protected. If you are interested in land for sale in Arizona, visit AllAcres.com to browse listings of affordable property. Call AllAcres at (855) 227-3741 or contact us online for land for sale in your area.