I was reminded once again, why I am so persistent on recommending my buyers to buy Homeowners title insurance.
We are ready for closing tomorrow, it is one hour before the walk through, and I get the call from our attorney that we have a little snag, and we might not be able to close tomorrow. The problem is an unreleased deed of trust dating back to 1987. I have not heard of any one not being able to eventually follow the trail, and get the lien holder to get proof of payment, but now we have to deal with a delay in our closing. If my buyers were having any doubts about the home this would be a perfect time for walking away. Starting tomorrow, the seller has 7 days to produce clear title.
I have been on the other side of this situation, and the buyer did walk away from the deal at the end of November, and I ended up holding on to that house until the market picked up again in March and sold for much less than the original contract.
Title insurance protects the home owner from any encumbrances, liens or title defects that stay with the home, even after is is sold several times. When you purchase the home what you get to prove ownership is the title to the property. This title is then recorded at the city courthouse. All liens against said property are also recorded at the courthouse. For example, when a home owner has a judgment against him, that judgment can be recorded against the property. When the homeowner sells the property this judgment has to be satisfied.
About Homeowners Tittle Insurance in Virginia Beach - Norfolk - Chesapeake VA. Talk to your closing attoreny because when the house is put up for sale the mortgage company will require Lender's title insurance and a title search will be done. A title researcher goes to the court house and goes back as far as they can looking for liens or defects in the title. The purchaser may or may not purchase tittle insurance. If the researcher misses a lien against the title, the property is sold with said lien attached.
When the property is sold or refinanced again the research starts again by a new title researcher. When this new title researcher finds the lien, the home owner's title insurer will indemnify the home owner who purchased it at the time of the initial purchase. If he didn't buy title insurance, the original lien holder has to be found and they have to provide a certificate of payment. This can take a couple of weeks or a couple of days. If the lien has not been paid and it is still attached, it must be paid at the time of closing.
The few hundred dollars to protect your investment is worth every penny. In the past 5 years, I have seen this happen three times. Liens from the 60's, 70's and now the 80's.
"I am not an attorney, and I have given a simplified version of what title insurance is. For complete information consult your attorney."
Call me at: 757-502-5324
About Homeowners Tittle Insurance in Virginia Beach - Norfolk - Chesapeake VA. Talk to your closing attoreny was first published on Hampton Roads Real Estate VoiceCopyright © 2010 By Tere Rottink, All Rights Reserved.