Why Title Insurance Is Important for Purchase of Investment Properties
The Greater Delaware Valley region is one of the most renowned metropolitan regions in the United States. This is particularly true in terms of population density as it ranks seventh in the country in this regard. Furthermore, it is eighth in all of North America, in this regard.
It might also interest you to know that it does not do badly by the world’s standards. This is considering how it ranks 35th in population density in the entire world.
Population density means that there are more people in a location to be offered products and services. As a result, many businesses and even people at large are interested in purchasing investment properties in this densely populated metropolitan region and its environs.
Well, this is fine as long as the right processes are followed. One such is taking title insurance seriously. This article intends to shed light on the need to do this when considering purchasing investment properties. Therefore, continue reading to learn more.
Title Insurance: A Key Factor for Successful Property Investment
Title insurance is not one of those things that you want to take lightly when purchasing investment properties. Violating this rule can be very costly in several ways.
Furthermore, taking it seriously also implies that the right agents are contacted for this purpose. Just so you know, not having the right agents handling this important aspect of investment property purchase can equally be costly.
For example, you can be charged outrageously, as so many people across the country have experienced. You can click here for more information on this.
By the way, this is usually the least of the worries when the wrong agent is engaged. So, pay serious attention to choosing the right agents. To further drive home the need to engage the right title insurance agent’s services, here are some of the importance of doing so:
It is more than just having access to relevant liability coverage if the need arises. It is equally about ensuring that everything checks out in matters of investment property purchases.
For example, ensuring that the purchased property’s title is clear, as well as marketable, is a huge part of what it is about. This is essential because having a title that is both clear and marketable would mean that the property in question does not have any lien or outstanding claim issues.
As a result, the chances of legal concerns arising in the future are very little or null. If a legal issue arises, there is a greater chance of coming out victorious if the property’s title is very clear and marketable.
Coverage of Legal Expenses
The goal is that legal issues regarding the property’s purchase or lending money for the same purpose do not arise. However, even with title insurance for investment purchases, this remains a possibility. This is even though the chances are very slim.
Bearing this in mind, taking title insurance seriously also benefits you if these legal issues arise. This is considering how expenses that are incurred in the legal process will be covered. This is one of the ways that the liability coverage that comes with this kind of agreement plays out.
By the way, the extent to which legal expenses will be covered depends on the details of the agreement. In light of this, you should be certain of every part of the agreement and its implications.
The real estate market can be full of many pleasant and unpleasant surprises. Speaking of unpleasant surprises, there have been situations in which people made property purchases and regretted doing so. This is because there were issues that threatened their ownership status, some of which can be very concrete.
As a result, people need to be very certain of the legitimacy of the property and that their ownership status will not be called into question after purchase. Having title insurance can provide a huge guarantee.
In other words, it significantly increases the marketability of your property, which is very important if you decide to sell the property. This happens by providing a great deal of buyer protection.
However, there is a kind of title that is considered of a higher standard than this one – Marketable Title.
More often than not, real estate purchases, including the purchase of investment properties can be very capital intensive. As a result, many people cannot afford to make such purchases with their direct funds. They have to take out a loan for this purpose.
Well, it turns out that most lenders have stringent rules before such loans can be granted. A lot of these rules are intended to protect their interest. For example, they need to be certain that the legitimacy and ownership status of the property is not questionable.
Speaking of the legitimacy and ownership status being questionable, there are several possible reasons for this, including:
- Zoning violation
- Variations in the title chain
- Outstanding mortgages
- Adverse possession claims
All of the aforementioned and more are reasons why the legitimacy and ownership status of a property can be questionable.
Lenders understand the importance of only issuing loans for the purchase of investment properties when the legitimacy and ownership status of the property is not questionable. This is especially true when the purchased property is expected to be used as collateral.
In light of this, title insurance increases your chances of securing loans for the purchase of investment properties. This is because of the significant amount of protection that it offers.
Buyers in the real estate market are not the only ones who need to worry about title insurance. The same also goes for lenders. Just like buyers need it to be certain that they are getting the right property and offered liability coverage, if the need arises, lenders need it as well. So, both parties should not undermine its importance.