Building in 2022? Why You Need Title Insurance on a New Construction!

Building a new home at Lake of the Ozarks is SO exciting, and for most people, it is a dream come true. Is also a lot of work, with a lot of decisions to be made.  If it’s your first time, most likely there’s a bit of a learning curve too. As a trusted title company at Lake of the Ozarks, the title agents at Arrowhead Title know that when it’s your first time building a home, there are some important things that are easy to overlook. One of those is title insurance. Quite often, people don’t even think about title insurance on an empty lot or a new build. However, there are some very important reasons why you need title insurance on your property and new construction just as much as you do on any other house. If you’d like to know exactly why having title insurance before you start building is the best plan of action, just keep reading this blog.

Proving property ownership

One of the main reasons for having a title search done is to ensure that the person who is selling you the property is the legal owner and has the right to transfer that ownership. Even on a lot, there may be previous owners, unknown heirs, errors in public records, and other clouds that could call into question whether the seller has legal ownership rights. Having a title search done will allow you to know if such clouds exist and to correct them if possible.  Having a title insurance policy will protect you in case something comes up after you purchase the land and have your home built.

Mechanics lien

It is the developer’s responsibility to pay the contractor and any subcontractors they have hired to build your home. It can be an absolute nightmare if the developer fails to pay the contractor or subcontractors. If that happens, they may be able to file a mechanics lien on your home until they are rightly paid. The last thing you want is to be facing foreclosure even though you have made your mortgage payments as agreed and paid the developer in full. Having a title search and title insurance is well worth the cost when it comes to knowing you will not be in the situation of having to pay your subcontractors all over again in order to have clear title.

Easements and restrictions

You have specific plans for the lot you want to purchase, but if there are easements and restrictions that you are not aware of, that can ruin your plans in a hurry. If there is an easement to put utilities through your yard, and that is where you planned on putting a swimming pool, you are out of luck. It’s better to know that before you purchase the lot, and especially before you invest the cost of building a home. The same goes for restrictions or encroachments, etc. You want to know what you’re buying and exactly how you can use it before you spend additional money on a new home build.

Improper records

You can read stories about places that experience housing booms, where houses are being built at a rapid pace, and local officials can be inundated with permit applications and the like. If a permit is approved even though the build does not fully meet code or local building requirements, and that is discovered later, you could be forced to correct the problem or bring the building up to code. They are even cases in other states where that literally meant having to lower the roof on a finished home in order to comply with local restrictions. Without title insurance, the homeowners would be left to bear the burden of that expense completely out of pocket.

Arrowhead is Here to Help You Minimize Your Risk and Maximize Your Investment!

Even though it is so easy to overlook, foregoing title insurance on a new construction is just too much of a risk to take. You need title insurance just as much as if you were buying any other home. At Arrowhead Title, we are experts at protecting homeowners from these kinds of situations. We have been providing real estate closing services at Lake of the Ozarks since 1984 and would be honored to help you with your new home build. We are very familiar with the real estate market at Lake of the Ozarks, and we are passionate about accuracy and integrity in our work. If you have any questions about title insurance at Lake of the Ozarks, feel free to reach out to us! If you’re interested in hearing all of the news and real estate tips from Arrowhead title, we invite you to follow us on our social media channels using the links below!


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