Now here’s a big topic that is not too exciting, but sooner or later it becomes important when you are going to sell a house in Amarillo. The topic is title insurance and the reason it’s important is because it was a big expense when you bought your home, and you may have wondered what in the world you had to insure, right? The value of title insurance doesn’t kick in unless or until you need it, meaning until you are in the process of selling your home and title issues are discovered.
Title issues are somewhat invisible, silent but deadly if you will. They are not something you can see, like you can see a broken cabinet hardware or a plumbing leak. Title issues are potential legal problems that attorneys and legal researchers find by sitting at computers analyzing the legal and financial history of a property. While they might seem harmless, title issues can cause frustrating delays in the closing process and additional expenses, too, possibly more expensive than fixing cabinet hardware or a plumbing leak.
So, now that you know why title insurance is important, you’re probably wondering how it works. If your car is damaged in a wreck you know that your car insurance will pay for repairs. Do you know what your title insurance can do for you? The premium you pay for title insurance buys you coverage for title problems that end on the day you buy the house. That’s right, your coverage ends on that date and goes back in time as far as necessary. This backwards-in-time element sets it apart from all other types of insurance you may carry. For those who sell a house in Amarillo the title insurance coverage ends as of the date the policy is issued and covers title issues that may arise on that date and then going back through time to cover any title issues that arise from past transactions.
While auto and homeowners coverage start on the day your policy is issued and go into the future, title insurance goes back into the past. When you sell a house in Amarillo and a title issue is discovered in the closing process, you will be relieved to have title insurance coverage going back in time before you bought the house because the cost of legal work to solve the issue will be covered.
However, title insurance often covers only your mortgage lender, not you. While you can purchase coverage for yourself, meaning your own legal interests, generally it is not automatic. The insurance you buy when you purchase a house in Amarillo is a policy to cover your lenders’ financial interest in the house, and to pay for the lender’s costs in solving any legal issues to achieve clear title.
This policy, the lender’s title insurance policy, does not provide coverage for your own legal expenses, but you are certainly free to purchase title insurance for yourself. I’ve found that it’s particularly important to purchase title insurance as the seller if you re selling a house with owner financing. You want to insure your legal and financial interests for a time in the future when the house is sold again and attorneys review the legal records on behalf of another buyer.