When you buy a Northern Illinois home, you are given a title.  The title is your right to possess and use the property.  A very important fact is that it may not be the home seller who owns the title.  If a bank has a mortgage on the property, they may own an interest in it. Or if someone has done work on the house and didn’t get paid, they could have a lien against it.  

How can you be sure that when you purchase a home that the title has no problems that go with it? And that the seller truly does own the property? These problems could end up being a financial loss to you. That is what the title search and title insurance is for. 

A title search will reveal if someone other than the owner of the property owns the title. This search can be done by examining public records to look up the history of property ownership. While you can easily do your own title search, if you are obtaining a loan to purchase the property, the lender will require that a qualified third party do the title search. The title search shows not only limitations on the use of the property and rights others may have in the property, but also liens or monetary obligations that are outstanding against the property.  

Title insurance is different than the standard insurance where you are covered in case of a future event. For example, if you get car insurance you are insured in case you have an accident, you buy health insurance in case you get sick.  Title insurance is different as it covers events relating to the title that have already happened. It does not cover anything that happens to the title after the date of issuance. For example if you have liens filed against the property for taxes that you have not paid, your title insurance policy is not going to help you. But, if the lien is for taxes not paid by someone who owned the house before you, then you may have coverage under your title policy. 

Title companies can do a title search on the property before issuing the policy to see if there are any problems with the title. This search is done to minimize the risks of offering insurance. The search can turn up problems with deeds, wills, outstanding mortgages, judgements, and tax liens on the property.   When these problems are not cleared, they will often be listed as exceptions to the policy’s coverage. You then would have to make the decision on whether the property was something you wanted or not, knowing the problems. 

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