After 30 years in the title and escrow business, and having been a real estate agent myself, I’ve seen plenty of deals either get saved – or derailed – over title issues. That’s why understanding title insurance is so important. Here’s a simple breakdown to help you explain it to your clients and keep your transactions running smoothly.
What is Title Insurance?
Title insurance protects property owners and lenders from problems related to a property’s title—the legal documentation proving ownership and the right to sell the property. It safeguards against issues like:
- Old liens
- Mistakes in public records
- Disputes over ownership
Unlike other types of insurance that cover future events, title insurance focuses on the past, ensuring the title is clear before closing.
There are two primary types:
- Owner’s Title Insurance: Protects your buyer’s ownership rights.
- Lender’s Title Insurance: Protects the lender’s financial interest in the property.
Why Do Your Clients Need Title Insurance?
Buying a home is often the largest investment your clients will make. Title insurance makes sure their investment is protected by:
- Securing Ownership Rights: Ensures no one else can claim ownership of the property.
- Addressing Hidden Risks: Covers issues like undisclosed heirs, forged documents, or clerical errors in records.
- Covering Legal Costs: If disputes arise, the title insurance company manages the legal challenges.
- Speeding Up Closings: A clean title simplifies the process, benefiting both buyers and sellers.
Addressing Common Misconceptions
Agents and client alike have misunderstandings about title insurance—here are a few and why they’re incorrect:
- “It’s Too Expensive”: Title insurance is a one-time fee that can save your clients thousands if issues arise.
- “A Title Search is Enough”: While important, a title search can’t catch everything—like fraud or unrecorded claims.
- “It’s Only for Buyers”: Sellers benefit too, as title insurance makes listings more attractive and prevents last-minute surprises.
Add Value to Your Clients
Title insurance might not be the most exciting part of real estate, but it’s one of the most important. By helping your clients understand its value, you’re building trust, reducing risk, and increasing the likelihood of referrals.
Have questions about title insurance? Call our experts:
- Kitsap County Title Department: 360-692-2233
- Mason County Title Department: 360-426-8288
Coming Up Next Week:
Next week, we’ll talk about “How Reviewing the Preliminary Title Report Can Save Your Transaction Before It Starts.” This step can help you spot potential problems early and keep your deals on track.
