6 Tips for Reviewing Your Real Estate Title Policy

Your real estate title policy is one of the crucial homeownership documents that you have. It might not seem like a big deal, but a real estate title policy is a key component of the process that gets you into your new home.

Have questions about your real estate title policy? Looking for some valuable information into what it is – and what it should be? Here are our 6 tips for reviewing your real estate title policy.

1) Make sure the title policy covers everything it should

Don’t forget – when you purchase a home, you’re not just purchasing the four walls (and the rooms, and the basements, and everything else) that make up the house. You’re also purchasing the property around the house. Check and make sure that what the real estate title policy encompasses your entire property. Know your property limits – make sure to check with the owners and the local authorities before you start the homeownership process – and check to see that they get covered explicitly within the real estate title policy. You might be surprised at what the “fine print” might leave out within the language.

2) Make sure you know who is actually performing the real estate title search. 

Another one that sounds very basic – but is actually very important when it comes to your real estate title policy. Generally, the real estate title search will get performed by a title company or a real estate attorney. The definition of a real estate attorney is pretty straightforward (they’ll specialize in real estate law and background searches). A real estate title company is different. Generally, a title company will get brought in at the end of the process to do the intense, in-depth, nuts-and-bolts research on the history of the house in order to make sure you can actually own the house. So, it’s important to know which one of these parties you’re going to rely on for the actual real estate title search; there may be different steps in the process (or a different time frame from one to the other).

3) Make sure you know how much money you’re going to be spending on the real estate title search. 

Here’s a fun fact: real estate title searches aren’t free! You’re going to have to pay for your real estate title search. So, make sure that you know exactly how much you’re going to have to pay for this essential service before you sign on the dotted line. Double- and triple-check the amount – you definitely don’t want a surprise when it comes to the amount of dollars you’re going to be shelling out.

4) Make sure you know who is going to be paying for your real estate title search.

There’s a caveat to that prior line about paying for the real estate title search: sometimes, you may be able to avoid paying that extra fee! Suppose you feel comfortable in negotiating a price or some other details. In that case, you can actually have the seller or the lender pay the money for the real estate title search (usually as part of a reduced price overall). This won’t happen in all cases, but just in case you’ve agreed not to pay for the title search, make sure that agreement gets reflected in the paperwork.

5) Make sure that the title policy checks over everything that needs to get examined. 

To detail this point, we should take a step back and talk about what exactly a real estate title policy does. Put simply, a real estate title policy is an insurance policy that you purchase during the homeownership process. This policy safeguards you against anything that might come up to disrupt your right to own the new piece of property. 

Sounds kind of simple, right? After all, the owner of the property you’re looking to buy must have the right to sell it to you – otherwise, why would they have it on the market?

You’d be surprised at how many times, however, the process stalls. There are a thousand little things that can go wrong in what’s called the chain of ownership – the list of owners going all the way up to the person that’s attempting to sell you the property.

There could be debts, liens, or settlements on the property that the new owner might get forced to pay. A divorce or other legal action in the past could have put the property in a different person’s name without their knowledge. There could be errors in paperwork on the state, local, or federal level that could disrupt the sale. There may be boundary issues that even the current owner might not be aware of. There could even be forgeries created by some unscrupulous person way down the line that could throw a significant wrench in the homeownership process.

Don’t worry; the odds are that your property will be free and clear of these problems. However, it is still important that whatever real estate title property you get spells out all of the elements that it will check for – so you can feel safe and secure in the legality of your purchase.

6) Make sure you know where your real estate title policy paperwork will get stored.

You never know exactly when you might need to access your real estate title policy paperwork – especially in the early years after a sale gets completed. Just in case some type of discrepancy arises in the process, be sure that you know exactly where your real estate title policy gets held. Keep it in a safe and secure place, or be sure to store the information of the party or organization that does have the real estate title policy.

How LemonBrew Can Help

Reviewing your real estate title policy – and title insurance in general – can get tricky and challenging. LemonBrew is here to help! If you’re looking for guidance on your real estate title policy (or anything else title insurance-related), be sure to explore our LemonBrew Abstract site. LemonBrew Abstract provides innovative title and escrow services to make your homeownership title insurance process as easy as possible.

Looking for some more guidance with the homeownership process? There’s nothing like a trusted and experienced hand to guide you through. LemonBrew helps bring you through everything related to the homeownership transaction – including title insurance and much more.

One more thing – if you’re looking to take a “deep dive” into all the issues surrounding homeownership, the LemonBrew real estate blog is the place to go. This blog features a vast library of the most informative real estate articles on the web. Check out blogs, including “The 10 Most Common Problems Found in a Property Title Search,” “Five Ways to Save Money on Title Insurance,” and “What Do I Need to Buy a House?” Read those (and more) here.