You find a home, you agree on a sales price, and everything runs smoothly. So smoothly that eight weeks after putting in an offer, you?re actually moving in ? time to celebrate. Of course, those celebrations will sour terribly if, in six months time, you receive a letter stating your local taxes are two years overdue and they are about to seize your home to pay for those back taxes. Can it happen? It sure can ? yet it is one situation that should never eventuate.
When buying a home, part of the settlement process includes home inspections, an appraisal, and a title search. If that title search is done correctly, it should unearth overdue taxes, condo fees and community charges (where applicable). The seller should then make good those taxes, fees or charges at the time of settlement. In most cases, the settlement agent will ensure that you receive a free and clear title to your home with no encumbrances what soever.
If you have purchased your home through a mortgage, your lender will have taken out title insurance. You should immediately contact your lender if there are title problems as their insurance will cover most problems. However, their insurance will only cover any loss to the lender, not to the borrower. Taxes are a cost that the lenders insurer will cover since auctioning the home is not in the lender?s best interest.
It is generally advisable to take out buyers title insurance at the same time that a lender takes out their insurance. This will cover you both should any problems arise once the sale has been concluded. In situations where there are unpaid taxes, consulting an attorney may also be advisable since this may involve either dishonesty on the part of the seller, or poor performance on the part of the title agent. Home title insurance is not expensive and it can be worth every penny should a problem arise.
Related posts:
- Home Buying Tip ? How To Save Money On Title Insurance
- Do I Need Owner?s Title Insurance When Buying A Home
- Do You Really Need Title Insurance?
- Understanding Title Insurance, Appraisal and Homeowner?s Insurance
- Save Money on Title Insurance
Source: http://www.realestatebriefings.com/home-buying/hometitleinsurancepennybuyinghome/
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