If you’re purchasing a brand new house, you’re probably wondering why you need title insurance on a newly constructed home. Title insurance is about protecting yourself from the debts, obligations, and errors to the title that the previous owners of your home may have incurred, but no one has owned your home yet besides you. So what gives?
The answer is simple: title insurance also protects you from other losses your developer may have incurred. They might have committed fraud or have complicated inheritance issues, which puts your home in jeopardy. Plus, there was a previous owner of the land your home is on.
Who were the previous owners of the land you’re building a home on? Did they have liens against their land, or are their heirs in dispute about the land? Even if this is previously undeveloped land, whoever owned it could have failed to pay their taxes, taken out a lien on it, or died and left a dispute about the land.
Through the process of securing title insurance, you can discover potential complications like these. The policy will cover the court costs if you need to resolve these issues in court.
Owners aren’t the only ones who can incur unresolved debts. If your developer gets into a dispute with a contractor, perhaps by failing to pay them, the contractor can put a lien on the property. No matter how responsible you think your developers are, even a subcontractor of their contractors can place a lien if they are not paid. That can put your title in jeopardy.
Though you can discover these potential liens, sometimes the clerk will make an error and fail to disclose a lien or other complication on your property. If so, title insurance can also offer you protection from this error.
Remember, your policy will protect you as long as you have an interest in this property. So, even if an error isn’t discovered until you build the home or move in, you’re still protected by your title insurance.
Ultimately, you want to trust that your developer did everything right, such as purchasing land that doesn’t have any liens and paying all of the contractors involved in their work. Title insurance helps promote trust in the real estate industry. It allows everyone to move forward with their work and purchases even if there may be an error because we all know that we’re protected. That trust is critical.
A Better Way to Close with BNN Services
Since 2008, BNN Services has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country. Unlike other signing services, BNN Services “touches” each and every file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.