Is Title Insurance Really Necessary?
Buying a home can feel both exciting and stressful…it’s no wonder when you’re making one of the largest financial and personal decisions of your life! On top of the purchase price and escrow payment, it can feel like there are dozens of smaller fees and payments that are added on. It can be tempting to shave off some savings here and there. One expense that comes into question is title insurance. Is title insurance really necessary?
Title insurance is an additional layer of protection for the buyer during a real estate transaction. While a title search will uncover many barriers to a successful transfer of the title (and ownership), such as liens or undisclosed easements, it may not catch every one. If there is a dispute to the title or a past defect with the title filing that goes undetected on the title search, it could mean a major headache at best, or legal dispute at worst, to correct. Title insurance is a one-time premium that is paid as part of closing to ensure that whomever is funding the purchase is protected from the cost to repair hidden title defects.
While it is undeniable that title insurance is a good safety net to purchase, the question remains: Is title insurance really necessary? From a legal standpoint, yes and no. The answer depends on how you are financing your purchase. If you are using a lender, then you will be required to purchase title insurance. This isn’t to protect you though; it protects the lender who holds the title in their name until your mortgage is paid off. If you are paying with cash, the decision is up to you. Owner’s title insurance will protect you for the duration of your ownership, with the caveat that it only covers outside claims to ownership. While optional, it is usually in your best interest to purchase the added protection.
The good news? If you are the buyer in Florida, chances are you aren’t on the hook for the title insurance premium. With the exception of a few counties, it’s customary for the seller to pay for title insurance.
When it comes to purchasing title insurance, you have options. If you are considering Clear Title for your title insurance needs, call us for a quote today.
Pensacola: (850) 361-4029
Pace: (850) 994-3838
Pine Forest: (850) 202-8518