By Roxanne Hendon
I recently worked with a widow who wanted to transfer ownership of the family house to her daughter. In order to ensure that her wishes were carried out correctly when she was no longer around to speak for herself, we first needed to “clean up” the title to the property. First, we needed to remove her late husband from the deed registered with the City of Milwaukee. It is important to eliminate as many potential obstacles to clear title as possible before they can become problems. Possible issues include any judgments, liens (unpaid debt registered through the court), back taxes, old code violations, personal indebtedness such as credit card or student loan debts, etc. Fortunately cleaning up the title was relatively easy for my client.
I am like a real estate firefighter in that I can help prevent financial and legal peril for families at title transfer time with a wonderful tool I call an “owner’s title policy.”
An owner’s title policy is an insurance policy that protects homeowners against potential losses due to title defects or ownership disputes related to their property. Here are some benefits of having an owner’s title policy:
• Protection against title issues
• An owner’s title policy provides coverage for losses arising from title defects that existed before the policy’s effective date.
• It protects you if someone else claims ownership rights to your property,
• If there are undisclosed liens, encumbrances, or judgments against the property.
If a covered issue arises, the policy will typically provide legal defense and financial compensation, if necessary.
Peace of mind: By having an owner’s title policy, you can have peace of mind knowing that your investment in the property is protected. It reduces the financial risk associated with potential title problems that may arise after you’ve purchased the property. Instead of bearing the full burden of legal costs or financial losses, the policy will cover these expenses, subject to its terms and conditions.
Lender requirements: When obtaining a mortgage loan, most lenders require a lender’s title policy to protect their interest in the property. While the lender’s policy protects the lender, it does not provide any protection for the homeowner. By purchasing an owner’s title policy, you ensure that you, as the homeowner, are adequately protected.
Cost-effective: The premium for an owner’s title policy is typically a one-time payment made at the time of property purchase. Considering the potential financial risks associated with title issues, the cost of the policy is often reasonable compared to the potential losses it can cover. It provides a cost-effective way to mitigate risks and protect your investment in the property.
Coverage continuity: An owner’s title policy remains in effect for as long as you or your heirs have an interest in the property. This means that even if you sell the property, the coverage remains intact, protecting both you and the new owner from pre-existing title defects. This continuity of coverage adds value to the property and can be appealing to potential buyers if you decide to sell in the future.
If you have recently purchased a property by way of quick claim deed or inheritance, you should invest in an owner’s title policy to protect your investment. If you purchased a property and did upgrades to the property that increased the value of the property you would want to purchase a new owner’s policy to increase the value of the policy from your original purchase price. This would be a great idea for investors who purchase multiple properties and do updates from your original purchase.
An owner’s title policy is just one of a number of wonderful tools I have at my disposal as an independent title closer, licensed Realtor and experienced property flipper. How can I help you and your family? Please contact Roxie@Summitlds.com