Understanding Title Insurance
By Raynor James, Fri Dec 9th

Title to a property is a record detailing the owners of theproperty and rights associated with the ownership. Titletypically shows a progression of ownership from the first ownerto the current one. Title is a fairly simple concept, but whenit goes wrong it is a nightmare. That is where title insurancecomes in.

Title Insurance

Title insurance guarantees that the title on a property ismarketable when you purchase the home, condo, land, etc. Youshould always pay for title insurance. It typically costs a fewhundred dollars and will save you a bundle if problems arise.

When you buy title insurance, a title insurance companyresearches the title for the property. The insurance companywill look to see if the title is clear. "Clear" simply meansthat the seller is truly transferring title to you and no otherperson can claim ownership. While this sounds fairly simple,rest assured that title problems arise all of the time.

Title Problems

You might be wondering how you could possibly have titleproblems. Here are a few examples:

1. Divorcing Couples - Divorce is unpleasant and sometime veryugly. In particularly nasty situations, one spouse may attemptto sell a home without telling the other. To gain clear title,you need both spouses to sign off on the sale. If you don't, youare going to become a party of the divorce proceedings. Now,wouldn't that be fun?

2. Estate Sales - If you are purchasing a house as part of anestate sale, there can be real problems. The heirs may not begetting along and in an effort to "get what's mine", may try tosell the residence without including all the heirs in thetransaction. If you buy this home, you could end up involved ina lawsuit filed by an heir left out of the transaction.

3. Ingress and Egress Issues - Title to a property can havetechnical issues related to egress and ingress. Occasionally,one finds title to a property that is so messed up that theowner doesn't have the right to enter or leave the land becauseto do so would require crossing another person's property. Inshort, the property is landlocked and something must be workedout with the neighbors. Typically, a solution comes in the formof hard, cold cash...lots of it.

These are just a few issues that can arise with title. With realestate, unique issues can arise all the time.

If you buy title insurance, you don't have to worry aboutproblems with title. If a problem arises, you calmly pick up thephone and call the title insurance company. The insurancecompany will come up with a solution, even if it means payingyou for bad title.

About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.

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