If you are looking to buy or sell any property in Southwest Florida, you may want to understand the benefits and the challenges that come with it. Whether it is a home, land, or commercial property, you bear everything, including the building architecture, renovations, landscape, and sewer systems. Before a seller transfers property to another person, they need to inform the buyer about the clear title of the property they are buying. Here are some facts you will need to know about title insurance in Southwest Florida.
When someone buys a property in Southwest Florida, it means they bear all the losses from the previous owner. Getting title insurance protects you from any financial loss that may arise from owning the property. Before the owner hands over the property to the buyer, the seller’s history will be crosschecked to establish a clear title. This means that the seller needs to be free of any legal claims against the property, before selling it.
Sometimes, the surveying company may fail to unearth any outstanding claims of title defects of the said property. Still, title insurance will protect any even that may arise as a result of a pending lawsuit of legal judgement.
The state of Florida is responsible for customizing promulgations for title insurance premiums. You do not need to buy the title insurance, but the owner’s policy will guide your steps. Ideally, there are two policies:
The owner’s title insurance coverage is equal to the purchasing price of the real estate. You get it as a one-time fee at closing, and it remains active provided you or your heirs continue displaying an interest in it. The owner’s title insurance protects you from any lawsuits that may question your ownership of the property. It also takes care of any legal fees involved when claiming your title.
The loan policy is often implemented by financial institutions to protect their interests in a property in case any legal issues related to the property arises when a person requests for a loan. Ideally, the loan policy coverage depends on your loan amount or it could be higher. Lenders rely on title insurance as collateral because they bear the risks arising from the home’s value.
The cost of title insurance is calculated on the purchase price of the property, ranging between $1,000 and $4,000. Therefore, property buyers in Southwest Florida need to pay on average 2-5% of the buying price in title insurance, for purchase prices lower than $100,000. Anything higher than that may attract a title insurance premium of $5.75 per $1,000 of the purchase price.
The legal and financial risks that come with buying and selling property in Southwest Florida are many. Getting title insurance not only helps protect your vested interest in a property, but it also safeguards your plans when buying other properties in future.