What Type Of Insurance Will I Need?
If you are the seller, you don’t need any insurance because your goal is to get paid for selling the property. If you are the purchaser, you are going to need a title policy. The amount of money that you will spend on title insurance is so small compared to the amount of money that it can cost to litigate a title dispute that comes up when you don’t have insurance. If there is actually legitimacy to the claim, then your insurer may very well be responsible for that and have to make that payment, as opposed to the purchaser that does not buy title insurance and is stuck with that. In the worst case scenario, the title issue is so bad for the prospective purchaser that if they want to go ahead without the insurance and they run into a title problem later, they could actually lose that property. If you are purchasing a property from a third party, it’s imperative to have title insurance.
If you are getting financing, you are going to be required to have a policy that protects the lender because the owner’s policy and lender’s policy are two different things. You could just have an owner’s policy that would not protect the lender, so the lender makes sure that a policy is issued to them as well. They also will require that they have property and casualty coverage. That’s in place when you purchase the property. There are also different types of warranty packages that are available to purchasers, which basically counts as insurance.
What Pitfalls Can People Avoid By Using An Attorney To Close a Real Estate Transaction?
Most of the time, if a problem arises, it has been not only prepared for but the attorney has drafted it in such a way that any exposure to the party is limited. It may be where the deposit goes if the deal falls apart. It may be if there are lawsuits that develop after the closing, whether they end up in mediation, arbitration, or litigation.
Many pitfalls could have been avoided if there were attorneys involved in the beginning. If there is no problem and you haven’t hired a lawyer, you got lucky. If things go poorly, the amount of money that you have to pay an attorney to try to fix the problem is going to greatly exceed what you would have paid the attorney to have prevented that problem in the first place.
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