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Most Purchase Agreements Are Contingent on Title Insurance

When you`re buying a home, one of the most important steps in the process is securing title insurance. But what is title insurance, and why is it so critical to the sale of a property?

Title insurance protects both the buyer and the lender against any defects or issues with the title of the property. It ensures that the seller has the legal right to sell the property, and that there are no liens or claims against the property that could affect the buyer`s ownership.

Most purchase agreements are contingent on the buyer obtaining title insurance, and it`s becoming more common for lenders to require it as well. This is because without title insurance, the buyer could be subject to significant financial loss if a title defect is discovered after the sale is complete.

Title defects can take many forms. For example, there could be an outstanding mortgage or tax lien that wasn`t disclosed during the sale, or there could be a dispute over ownership or boundary lines. In some cases, the title could be completely fraudulent, with someone pretending to own a property they have no right to sell.

Without title insurance, the buyer would need to go through legal proceedings to resolve any title issues, which can be incredibly expensive and time-consuming. Title insurance, on the other hand, provides a one-time payment that covers the cost of any title defects that are discovered after the sale is complete.

While title insurance is a one-time cost, it can save the buyer thousands of dollars in the long run. And for lenders, it provides peace of mind that the property being used as collateral for the loan has a clear title that won`t be subject to legal disputes or other issues.

So if you`re in the process of buying a home, make sure you secure title insurance before closing the sale. It`s a critical step in protecting your investment, and a wise investment in the long-term security of your property ownership.