Do I Need Title Insurance When Buying Land? – Mathis Title Company

land for sale sign on green grassIf you are planning to purchase a piece of land, you may have questions about its value, what it can legally be used for, and how you can protect it. In fact, there is one form of insurance that can protect this type of property: title insurance – which is substantially different from other forms of protection. Here is a close look at title insurance and how it applies to vacant land. Including the answer to the question, do I need title insurance when buying land?

why is title insurance necessary?

When you buy a new home, land or any other property, there is always the possibility that you face certain risks associated with mistakes made by the previous owner. For example, the previous owner of your home may not have paid property taxes. Claims can also arise from liens, due to contractors saying they weren’t paid for work completed on the house before you bought it (mechanical liens), or due to a falsified will or other legal document. This is why title insurance is different from other types of insurance: It protects you against past claims rather than future claims.

Reading: Do i need title insurance when buying land

According to real estate expert Sandy Gadow, a former title and escrow officer, “Historically, title insurance claims represent between 4% and 6% of the total revenue collected by title companies.” . Title insurance is based on the concept of “loss prevention” – the idea that time and money are spent primarily with the goal of preventing title problems from occurring in the first place.

protect your biggest investment

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Just like a new home, land is a big investment that needs to be treated with care. This means that in addition to performing routine maintenance, it’s also important to protect it from anyone or anything that could harm it or claim your property.

do you need land title insurance?

buyer talking to agent to know Do I Need Title Insurance When Buying Land?The answer to this question is a resounding yes. You should undoubtedly purchase a title insurance policy, regardless of the things that sit on your land. Additionally, be sure to remember that a deed simply grants a new individual ownership of a property but does may not necessarily terminate the ownership rights of previous owners. Even if your land is completely vacant, there may still be unanticipated issues concerning taxes, property lines and legal records, among other things. A reputable title insurance company can assist you with the process of handling these types of problems.

You should also know how the land is zoned before you buy it. this means going beyond simply learning the land’s zoning designation (ie, “residential” or “commercial”); it is highly recommended that you find out what restrictions may apply to the land. You should also be aware of any easements that could potentially render parts of your land useless.

what type of title insurance do you need?

To protect your land, you need owner’s title insurance, which is substantially different from lender’s title insurance. The latter type of insurance policy protects the lender against prior lien rights that may arise on the title of your property, while the former protects you, the owner, from claims. Owner’s title insurance is a one-time payment that is generally paid at closing and is good for as long as you maintain an interest in your property.

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empty land being bought with title insuranceThe person responsible for paying for title insurance varies by state, so be sure to stay informed about your state’s laws regarding this subject. In certain states, your title insurance company may provide you with an itemized list of fees at closing. Don’t hesitate to reach out to an experienced real estate attorney or title agent for more information on this subject.

schedule an appointment with a title insurance expert

Contact the professionals at Mathis Title Company in Fairfax, Virginia to learn more about owner’s title insurance and how it can protect you when buying land. We provide real estate settlement services (including title insurance) and legal advice to buyers and sellers.

During a home purchase, Mathis will hold all funds in an escrow account prior to title transfer and closing. Once the title order has been approved, your examiner can begin a title search and a preliminary report will be provided for you to review. then our agents will contact a trusted underwriting company to issue an insurance policy. We offer basic and extended homeowners policies, the latter of which can protect you from additional liabilities.

If you decide to refinance your property within 10 years, you can request the title insurance reissue rate. Call Mathis Title Company today at (703) 214-4020 or contact us online to learn more about title insurance.

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