Reasons You Need Title Insurance For Newly Constructed Homes
If you're considering purchasing a newly constructed home, you may be thinking that purchasing title insurance for a new home isn't necessary. Some buyers of newly built homes may assume that because they’re buying a home that no one else has ever owned, title issues shouldn’t be a problem. However, title insurance is critically important to buyers of both new and resale homes for many reasons. This week, we're looking at the reasons why even newly constructed home titles should be covered by title insurance.
Legal Ownership of the Land
In a brand new subdivision, you need to make sure the land was properly subdivided and that your home is on the correctly identified lot in the subdivision so that there’s no question of ownership in the future. While your house is new, the land it’s built on is not, so it’s possible to have a third party make a claim on the property. When title faults or claims are left unsettled for years, the new owner could face a significant financial loss at a later date. For instance, he might need to pay money out of his own pocket to have a lien removed and obtain a “clear” title, or worse, he could lose the title to his property due to fraud, forgery, errors or omissions.
Mechanic's Liens
In addition, a builder may have failed to pay subcontractors and suppliers. This could result in the subcontractor or supplier placing a lien on your property. Even if the homeowner pays the invoice provided by the home builder, the latter might fail to pay the subcontractors for the materials supplied and services rendered. Some other liens that may be placed, even on new construction, may be liens for unpaid mortgages, taxes, and/or HOA fees.
Clerical Errors
Title insurance also covers mistakes made in the recorders and registrars of deeds’ offices. So if a lien is properly filed but it cannot be found in a search due to a courthouse error, then the lien holder still can assert their rights, and the homeowner is left to sue the county. A “small” clerical error, such as a name being spelled incorrectly or the square footage of the home being documented wrong, can negatively impact the home-buying process and may result in significant financial loss.
With title insurance, you can relax and enjoy the peace of mind that you are the legal, rightful owner of your property and that your allies at Arrowhead Title, Inc. will help protect your investment, should the need arise. If you're in the process of buying a home at the Lake of the Ozarks, we hope you will keep us in mind as your go-to title insurance company at the Lake. We treat all of our clients with the utmost respect, integrity, and - above all - accuracy.
Legal Ownership of the Land
In a brand new subdivision, you need to make sure the land was properly subdivided and that your home is on the correctly identified lot in the subdivision so that there’s no question of ownership in the future. While your house is new, the land it’s built on is not, so it’s possible to have a third party make a claim on the property. When title faults or claims are left unsettled for years, the new owner could face a significant financial loss at a later date. For instance, he might need to pay money out of his own pocket to have a lien removed and obtain a “clear” title, or worse, he could lose the title to his property due to fraud, forgery, errors or omissions.
Mechanic's Liens
In addition, a builder may have failed to pay subcontractors and suppliers. This could result in the subcontractor or supplier placing a lien on your property. Even if the homeowner pays the invoice provided by the home builder, the latter might fail to pay the subcontractors for the materials supplied and services rendered. Some other liens that may be placed, even on new construction, may be liens for unpaid mortgages, taxes, and/or HOA fees.
Clerical Errors
Title insurance also covers mistakes made in the recorders and registrars of deeds’ offices. So if a lien is properly filed but it cannot be found in a search due to a courthouse error, then the lien holder still can assert their rights, and the homeowner is left to sue the county. A “small” clerical error, such as a name being spelled incorrectly or the square footage of the home being documented wrong, can negatively impact the home-buying process and may result in significant financial loss.With title insurance, you can relax and enjoy the peace of mind that you are the legal, rightful owner of your property and that your allies at Arrowhead Title, Inc. will help protect your investment, should the need arise. If you're in the process of buying a home at the Lake of the Ozarks, we hope you will keep us in mind as your go-to title insurance company at the Lake. We treat all of our clients with the utmost respect, integrity, and - above all - accuracy.
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