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How title insurance protect an investor’s real estate

On Behalf of | Feb 16, 2018 | Real Estate Law

Many investors in Nevada may, like other people, not pay much attention to title insurance when they are closing on a new piece of property. After all, in the vast majority of cases, a title insurance policy is just something a buyer deals with at the time of a real estate closing.

In reality, though, title insurance is one important piece of an investor’s strategy to protect his or her real estate form a sudden loss. Unlike property insurance, however, title insurance will cover a monetary loss if it turns out that the investor does not have full legal title to the land.

For instance, it may turn out the land has a lien against it that the investor would otherwise have to pay off; in the worst title cases, it may be that the investor does not legally own the investor thought she had purchased and had hoped to develop and make income off of. While it may seem like people should be able to figure out who owns a piece of land, in reality, lots of issues in this respect can come up.

However, it is important to remember that title insurance only covers title defects that are unknown at the time an investor buys a piece of property. In fact, title insurance companies will make a list, as part of a document called a commitment, prior to issuing a policy showing exactly what title defects the insurance company or its agent identified. The title insurance policy will not cover these listed defects.

It is important for an investor to consult with an expert in real estate law if anything at all unusual appears on his or her title commitment, as it is the responsibility of the prospective buyer to know the significance of what is on the title commitment and whether there is anything the prospective buyer can do in this respect.

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