23rd Aug, 2011

Title Insurance Important for Fredericksburg TX Real Estate Transactions

Title insurance protects buyers and owners of Fredericksburg and Texas Hill Country real estate in many important ways.  Although it is paid as a one-time premium at closing, an extra cost usually resented, the title insurance pays off when Hill Country homeowners most need its benefits.

Title insurance protects owners of Fredericksburg TX homes, Texas ranches, and other Hill Country properties—usually the single largest investment in a resident’s portfolio.  The insurance assures that the property is free and clear of title defects that may have been hidden over time.  For example, ownership may have changed several times by sales, foreclosures, inheritances, and other means.  Each transfer of ownership opens the door for mistakes, sometimes clerical mistakes that can put a property’s true ownership at risk.

Nowadays, the increasing number of foreclosure or REO sales compounds title problems.  The reason is that banks as REO owners are a step removed from and unfamiliar with the properties in their portfolios.

Most bank sellers have never seen the properties they are selling.Normally, sellers are required to disclose know defects, including details about easements, mineral rights, encroachments, property boundaries versus current usage, etc.  However, the bank owner doesn’t know that the neighbor was given permission to plant a vegetable garden on the far corner or to walk through the property.

Title insurance allows property owners to relax knowing that their property is fully theirs to use or to sell.  Title companies offer several types of coverage that vary in cost.  They range from standard coverage to enhanced or extended coverage to comprehensive or “eagle” policies.  Standard coverage may run about $1000 for a $275,000 purchase.  Upgraded coverage costs just a little more.

Standard title policies generally cover any defect in the title that exists at the time of purchase, prior recorded mortgages, judgments, and other liens, easements or use restrictions, and right of legal access.  It also covers forgery, fraud, and duress or a title vested in someone other than the seller as well as unmarketable titles.

The enhanced or extended coverage additionally covers an incorrect survey, claims for adverse possession or prescriptive easement, pre-existing violations of subdivision laws or zoning ordinances, silent liens like estate tax liens, and coverage for encroachments and conflicts in boundary lines.

The comprehensive eagle policy further covers post-policy forgery, forced removal of non-permitted improvements, post-policy encroachment, and post-policy increase in value up to 150 percent, plus location and dimensions.

For expert guidance in your personal search for the ultimate piece of the Hill Country, please call Dale E. Cook, MBA and owner of SAGE- Premium Texas Real Estate at (830) 992-0056.

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