Buying a vacation or second home in the Deep Creek Lake or Garrett County area can be the attainment of a life's goal and it's often a rather sizable investment as well. A strategy to protect this investment should be incorporated into your real estate buying process. One strategy often overlooked and misunderstood is title insurance which can help protect your real estate purchase.
What is Title?
Title is the legal evidence, of right, that a person has to the ownership and possession of land. Since it is possible that someone other than the seller could have legal right to the property you are buying - undisclosed problems could remain even after a careful title search in the public records. These hidden defects can sometimes be found months or even years later in some cases.
A Lender's Title Insurance Policy Does Not Protect You
If you are borrowing money from a bank to complete your real estate purchase the lender will only require that you purchase a lender's policy - which only protects the lender and their lien. A lender's policy does not protect the property owner! Make sure you ask your settlement attorney or title company for a quote on an Owner's Policy as well.
Title Insurance Costs
The one time premium for an Owner's Title Policy is related to the value of the property so it can vary widely in the Deep Creek area. It's typically on a scale of $1,000 for a $300,000 purchase - and around $3,000 for a real estate purchase of $1,000,000. It is a one time expense that you pay at settlement but it provides coverage for as long as you or your heirs own the property.
Basic Title Insurance Coverage Protects Against
- someone claiming an ownership interest in your title.
- leases, contracts, or options affecting your title.
- someone claiming to have rights affecting your title due to forgery, impersonation, or fraud.
- someone having a right to limit your use of the land.
- unmarketability of your title.
- a defective title.
In addition, a newer enhanced Owner's Policy provides coverages against losses caused by zoning violations, subdivision violations, and building permit violations to name a few.
It's important to ask your settlement attorney or title company what you are covered against and whether or not they are quoting a basic Owner's Policy or an expanded “enhanced” Owner's Policy. If you need help, give us a call or send us an e-mail - we'll get you in contact with one of the local title companies.
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