The owner of the property I want to purchase has lived in the home for only six months...

The owner of the property I want to purchase has lived in the home for only six months. He had a title search done six months ago. Why do I need another one? Because the owner could, in a very short time, do many things to encumber the title. For example, he could grant easements or construct improvements that encroach on adjacent property. He could get married or divorced or have a lien filed against the property. It is necessary to conduct an up-to-date title search to uncover any such problems.

If the builder of my home already has title insurance on the property, why do I need it again?

If the builder of my home already has title insurance on the property, why do I need it again when I purchase the land from him? A title policy insuring the builder does not protect you. Also, a great many things could have happened to the land since the builder's policy was issued. Liens, judgments and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property - causing you aggravation and costing you money.

Are there different types of title insurance policies?

Yes. Basically there are two different types of policies -a loan policy and an owner's policy. The loan policy protects the lender's interest in the property as security for the outstanding balance under the buyer's mortgage. The owner's policy safeguards the buyer's investment or equity in the property up to the face amount of the policy. (Title insurers in many states offer increased policy coverage through inflation endorsements to cover increases in value due to inflation.)

How much does title insurance cost?

Probably a lot less than you think. Charges vary in different sections of the country, but generally the cost of title insurance (including search, examination and related services) amounts to about one percent, or less, of the cost of the property. And unlike other insurance premiums, which must be paid annually, a title insurance premium is paid one time only, usually at settlement.