Oftentimes, people imagine the real estate closing process as an hour-long meeting filled with seemingly endless paperwork to be signed. The signing process is only a step in the real estate closing process. Equally as important to a real estate closing is the title examination, which is meant to ensure that there are no issues when taking title to your property. When a title examination fails to catch a problem in title, serious implications can arise for the purchaser of the property. Luckily, title insurance exists to provide protection from these issues.

Common Title Issues

When it comes to title, countless issues can produce a defect, or "cloud," in the title of your home. While some title issues may lay dormant and cause little harm, some title issues can cause serious problems down the road. Common issues in title include:

• Illegal deeds
• Forged documents
• Errors in the public record
• Undisclosed liens or mortgages
• Unknown easements or encumbrances
• Invalid powers of attorney

If an issue in title presents itself, a title insurance policy will often come into play, whether it be a lender's policy or an owner's policy.

Lender v. Owner Title Insurance Policies

Title insurance policies come in two forms: lender policies and owner policies. Although each policy achieves a similar purpose--to protect against clouds in title that can cause issues down the road, the two forms of policies have some stark differences.

If you are taking out a mortgage for your home, a lender's title insurance policy is required by your lender. This form of title insurance protects the lender from any hidden defects in the chain of title to your home. This policy, however, only protects the lender--the owner is not protected by a lender's policy in any way.

An owner's title insurance policy, in contrast, is an optional expense in your real estate closing. Such a policy is designed to protect the owner of the property from any gaps or defects that may arise when taking title to a home. Although not a requirement, an owner's title insurance policy is a wise investment for anyone who purchases a home.

In the Market for a Home? Call Today

If you have begun your search for a new home in New York City, you deserve competent representation from pre-contract to closing. Melvin Monochan has assisted countless individuals in New York City in the closing process and is ready to help you as well. Don't look any further for a closing attorney with your best interests in mind--contact the Law Offices of Melvin Monochan, PLLC by calling (347) 620-0565 or completing a contact form today.