Today, I have a special guest with me, Malay Wadhwa from Pacific Coast Title, to give us some insight about the role of title insurance in the real estate process.
What is the role of title insurance?
Title insurance is very insignificant, but at the same time, a very significant part of our transaction. We make sure that the homeowner that is coming onto the property is free of any unforeseen challenges and that they have a free and clear title.
What are the most important things that a client should be looking for when they’re reviewing their title policy?
They should definitely be looking at the legal listings, the liens, and the statement of information.
There are two types of liens that are commonly attached: unsecured liens and secured liens. Secured liens are attached with to property and are available through the public records. Examples include child support liens, mechanic liens, or deeds of trust. Unsecured liens can be any liens that are attached to the individual that owns the house.
When clients are buying a home, how should they hold their vesting?
If, for example, a husband and wife are buying a property, they can buy it as a joint community property with the right of survivorship. Two individuals can also buy a property together, each with 50% interest on it.
The reason that we specify the interest is so that, if need be, one can assign their interest to their spouse and children. It is important to do this because if, say, they just acquired a property without specifying the interest, then they have to go to the court to analyze who owns what percentage of the property.
Additionally, sometimes it’s best to put the property in a living trust. A living trust allows the homeowner to assign a beneficiary without going into the court. It adds an extra layer of protection for their property from any online frauds that people sometimes try to commit on free and clear properties.
If you have any additional questions, please feel free to reach out to me. I’d be glad to help.