Buying a home in Illinois is one of the biggest decisions you’ll ever make. It’s no mistake that owning a home is part of the “American Dream.” Real estate is one of the best assets you, your family, and/or your business can own.
Acquiring Illinois real estate creates a pathway toward generational wealth, so it’s imperative that you take a holistic approach. The fewer stones left unturned the better protected you are. This is exactly why we advocate for our clients to purchase title insurance.
What is Title Insurance?
Title insurance is another layer of insurance for your home that protects you from financial losses due to most claims against the title of a property. Title defects can include liens, boundary disputes, easement encroachments, public record errors, and certain false claims or representations of the title owner.
If you don’t have title insurance, you risk hundreds of thousands of dollars in the home-buying process. Without a policy, upcoming claims against your title expose the money you put into the home.
For example, say you move forward with the purchase but never secure a policy. Someone claims you don’t legally own the title because the seller did not have a legal right to sell the property due to an ongoing dispute involving the transfer of the title through probate. This puts your purchase and your money in jeopardy. A title insurance policy protects you from such risks.
Lender’s Title Insurance vs. Owner’s Title Insurance
Your mortgage lender will have a title insurance policy. This protects their interest in the property at the full value of the loan itself. However, this policy is not intended to protect the buyer – you need your own policy (many lenders require the owner to have their own).
Your policy should have a different value attached to it because you need to protect the full purchase price and not just the value of the loan. It’s important to include the total of any down payment and earnest money included in your Illinois real estate transaction.
Why You Need an Attorney for the Title Process
This is where a real estate attorney comes in. Having an attorney review your title insurance policy ensures you have all the necessary protections in place before proceeding with a purchase.
More importantly, your attorney is able to review public records and investigate any potential title defects. If any are discovered, an experienced attorney has the ability to quiet those title defects and ensure you are able to proceed with the purchase as planned.
If you are buying a home in Illinois and have questions about title insurance or need assistance in selecting the right policy, contact Velazquez Consumer Law, LLC.
Velazquez Consumer Law
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