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Important_Whether you’re a newcomer or a veteran to the real estate scene, you’ve probably heard of “title insurance” at some point in your travels. For some, title insurance can be one of the trickiest terms to comprehend in the real estate world, and it leaves many in a puzzling state. But fear not, for we are here this week to break down the definition of title insurance, and give you the information you need to know, while leaving out all of the extras.

Title insurance, at its core, is simply a type of insurance. It is a policy that will protect you and your assets in a situation that is not to your benefit—no different than homeowners, health, or auto insurance. However, what title insurance protects is what sets it apart from its counterparts. Title insurance protects you against any type of property lost that occurs from past liens, encumbrances, or defects in the title. Liens are debts placed against one’s house that are collected on the sale of the property. So, if there is a lien on the property that was not picked up during the title search, title insurance protects you from being responsible for it.

If you are taking out a loan on a property in the State of New Jersey, title insurance is required by the lender. However, if it is a cash sale, no title insurance is needed, but we advise that you do get it. Title insurance is a one-time fee, unlike health and auto insurance. Once you pay for title insurance, you are covered for as long as you or your heirs own the property. In either case, whether cash buy or mortgage, title insurance is paid for by the buyer, and is done so at the time of closing. It is essentially the last hurdle you have to jump through before you have the keys to your new home.

At first, the concept of title insurance may seem daunting, but after breaking it down, it’s pretty simple. It’s just another form of insurance that protects you should someone who thinks they have a claim to the title comes after you. At a one-time fee, it is a cheap investment that could potentially save you millions down the road. As the old saying goes, “better to have and not need, than to need and not have.”

Should you still have questions about title insurance or any part of the real estate transaction process, feel free to give us a call or come on by for a visit. We would be more than happy to put your mind at ease.

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