Closing Costs Explained: Owner's Title Insurance

Closing Costs Explained: Owner's Title Insurance


Title insurance is an important component of the closing costs in a real estate transaction. While it contributes to the high price of closing costs, it provides protection to both the buyer and the lender against any issues that may arise with the property's title.

Here are some specific examples of how owner's title insurance can save you money and protect your investment in Atlanta real estate in various scenarios:


Undisclosed Liens

Let's say you purchase a property without owner's title insurance, and later discover that the previous owner had outstanding liens against the property. Without title insurance, you would be responsible for paying off those liens, which could amount to a significant financial burden. However, if you had owner's title insurance, the policy would cover the cost of resolving these undisclosed liens, saving you from unexpected expenses. 


Forged Documents

In some unfortunate instances, forged or fraudulent documents may be used in property transactions. Without owner's title insurance, you could face legal battles and financial losses if someone challenges your ownership based on such fraudulent documents. With title insurance, the policy would provide coverage for legal defense fees and potential financial losses associated with the forged documents.

Errors in Public Records

Mistakes can occur in public records, such as incorrect property descriptions, inaccurate surveys, or missing signatures. These errors can create complications and disputes regarding property ownership. Owner's title insurance would protect you in such cases, covering legal expenses to rectify the errors and defend your ownership rights.

Boundary and Survey Issues

Disputes over property boundaries or issues with an inaccurate survey can arise after you purchase a property. These conflicts can lead to costly legal battles to resolve boundary disputes or to rectify survey inaccuracies. However, with owner's title insurance, you would have financial protection, as the policy would cover legal expenses and potential losses associated with boundary and survey issues.

Undiscovered Encumbrances

Owner's title insurance can also protect you from undisclosed encumbrances that may affect your property's value or use. For example, if there is an unrecorded easement that allows others to access your property, it could impact your enjoyment and potential future development plans. Title insurance would provide coverage for addressing and resolving such encumbrances.
It's important to note that the specific coverage and terms of owner's title insurance may vary depending on the policy and jurisdiction. Consulting with a qualified real estate attorney and reading the terms of the insurance policy carefully can help you understand the extent of coverage and potential savings in your specific situation. 
Owner’s title insurance policies are optional but highly recommended. A one-time fee at closing provides you insurance for as long as you own the property. 

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