Finding Your First Home

Posted on: 17 October 2016

For many homebuyers, purchasing real estate title services may seem like an unnecessary expense.  After all, the chances the home seller is trying to unload a piece of property he or she doesn't actually own is low. However, title companies perform a number of tasks and services that can save you a lot of heartache, headache, and legal problems down the road. Here are two you may not be aware of.

Uncover Encroachments

In the course of investigating the validity of a title for a piece of real estate, the title company may require or conduct a survey of the land. This is to ensure you're actually getting the amount of land you're buying and to confirm the boundaries of the property. In addition to these things, though, a land survey can uncover encroachment issues.

Encroachment occurs when one property owner violates the property rights of another owner by placing plants and buildings on the victim's land. Most of the time, the encroachment is the unintentional result of the person not knowing where the property lines are. Occasionally, though, the encroachment is on purpose.

Whether intentional or not, encroachments represent a real threat against your investment, because the violator can try to take the land using adverse possession laws. You'll spend thousands of dollars in legal costs fighting the adverse possession or getting the other person to stop using your land. You'll need to factor in this issue when deciding whether to continue purchasing the property or how much to pay for it.

Protect Against Losses

Once the title company clears a property, it will approve you for title insurance. This insurance protects you in case someone appears out of the woodwork claiming to be the owner of the property you purchased.

There are two types of title insurance: lender's and owner's. Lender's title insurance protects the mortgage company in the event a claim is made on the property and owner's title insurance protects you. In either case, if the claimant successfully proves he or she owns the house and/or land, the insurance will reimburse you and/or the lender for any losses sustained.

If you have a mortgage on your home, the creditor may require you to purchase lender's title insurance. However, owner's title insurance is something you can opt to get separately. In some cases, the seller may be required to pay for owner's title insurance for you as part of the closing costs associated with the sale of the home. You'll need to check your local laws for more information about this.

Real estate title services can be beneficial in a number of ways. Contact a title company like TitleSmart for more information about how they can help you protect your investment.