At first glance, title insurance seems like something you would want for an older home. Perhaps your home has had 3 previous owners, and you want to ensure that they are all properly addressed so you can move in with a clean title.
However, newly constructed homes have their own intricacies that a title company will need to assist you with.
For those who are looking at their brand new dream home, let’s dig into the roots of your property ownership and answer the question you might be thinking to yourself: “Why do I need title insurance if I’m the first person to own my home?”
Not only do you need to consider the home itself, but also the land it sits on top of. While you may be the first owner of a newly constructed home, the chain of title on your property has likely moved from the landowner, to developer, and then to you.
With every change of hands, there is the opportunity for ownership risks. Here are a couple things to consider:
Land ownership changes shape when it is sold to the developer, divided up, and then sold again to you. In a new subdivision, you want to ensure that your lot is properly accounted for in the title.
Many people worked on your property, from roofers to electricians. There could be unresolved payments between your developer and any contractors or suppliers that could result in a lien being placed on your property.
A title search will find these unexpected hiccups, and your title insurance policy will protect you from them, assuring you and your mortgage lender that your property ownership is in the clear.
Source: Stewart Title Guaranty Company