Buying a new home in Florida comes with a flood of information – you’ll hear terms you may be unfamiliar with, be required to sign documents you’ve hardly had a chance to review, and simply feel overwhelmed by the stress and pressure of everything hitting you at once.
Amid this dizzying time, it can be easy to fall prey to misconceptions and myths about the closing process – specifically title insurance. All the buzz can make title insurance sound confusing, unnecessary or even like a cash grab.
It’s not.
We’re here to clear up misconceptions about title insurance because it is one of the easiest and smartest ways to protect your investment for the long haul.
Myth #1: “Title Insurance is Just Another Closing Cost I Don’t Need.”
We get it. Closing costs can be a real damper on an already pricey endeavor. It feels like there are fees upon fees upon fees. You may be left wondering why you should pay yet another one. But here’s the deal. Title insurance is one of the most important protections you can get as a property owner, and it requires just a one-time premium payment to be activated. What’s more, the party who pays for it can be negotiated. In Florida, the party responsible for paying for title insurance can vary by county, but this is never a rule set in stone. Be sure to discuss your options with an experienced real estate attorney before agreeing one way or another about paying for title insurance.
Myth #2: “I Don’t Need Title Insurance if I’m Paying Cash for a Property.”
Paying cash doesn’t make you immune to title problems. Title defects, ownership disputes, or unpaid debts connected to the property can still surface after you purchase it. And while it’s true there are different types of title insurance policies – commonly owner’s title insurance and lender’s title insurance, but even if you are paying cash for a property and do not need a lender’s policy, it’s still highly, highly recommended to protect your investment with an owner’s policy.
Myth #3: “Title Insurance Is Too Expensive.”
False. Title insurance is a mere fraction of the total purchase price of a property, and this one-time cost protects you for as long as you or your heirs own the property. Plus, it only takes one title dispute or legal battle to realize how cost-effective title insurance is.
The cost of title insurance in Florida is based on the sale price of the property and Fla Stat. §627.7825specifies exactly how title rates are calculated. While paying another expense on closing day may not feel great (see Myth #1), it’s a drop in the bucket compared to what you could lose if a title issue arises.
Myth #4: “The Title Search Will Catch All Potential Issues So Insurance Isn’t Necessary.”
While a thorough title search can uncover many issues, it’s not foolproof. Title searches are conducted by professionals who examine public records for problems like liens, judgments and ownership disputes, but sometimes issues can slip by undetected or the title problems may not show up in public records. For example, forged documents, clerical errors, or undisclosed heirs might not be uncovered in a standard title search. Title insurance serves as a safety net for these “hidden” risks and protects you from problems that aren’t detected during the search.
Contact Our Team at Sirulnik Law and ADS Title Company
Title insurance might not be the flashiest part of buying property, but it’s one of the most crucial protections you can have. It ensures that your ownership is secure, your investment is protected, and any unexpected legal claims won’t drain your bank account.
As you prepare to close on a new property in South Florida, get in touch with our team at ADS Title Services, Inc. to learn more about title searches, title insurance, and the real estate closing process in Miami.
