What title insurance does for you
When you buy real estate, you’re buying all the assets and liabilities associated with that property. Title insurance:
- Proves the seller has legal authority to sell the property.
- Ensures there are no liens.
- Covers problems due to fraud, legal issues and divorce claims in transferring title.
- Protects you from prior forgeries, mistakes in legal documents and inheritance.
- Protects you against someone challenging your ownership of the property.
Who should consider buying title insurance
You might need it if you buy real estate in Washington state. If your lender requires it, you'll need to purchase it.
Lender title insurance:
Your lender might require you to buy a lender title insurance policy equal to the amount of your loan. It protects your lender up to the amount of their loan, but it doesn’t protect your interest in the property. Even if you refinance, you might need to buy lender title insurance. It will protect the lender from any issues that have come up since you bought the property, such as liens or easements.
Owner title insurance:
To protect your interest, you can choose to buy an owner’s title policy for the full price you paid for the property. Generally, most sellers pay for the owner’s policy.