When buying a Tucson house, you'll need to take out title insurance. Learn the difference between the two types available and what question you should ask the title company before buying it.Before ownership exchanges hands in a Tucson real estate transaction, the title company performs a title search. Why? To see who legally claims ownership of the property. It also helps unveil liens on the property. These need to be cleared up before the transfer of ownership takes place. As part of this process, you must take out title insurance. This protects you and the title company against any financial loss.

Title Insurance

Types of Title Insurance

First, it helps to know what types of insurance you run across for your title needs. There are two: lender's and owner's. Lenders require that buyers pay for lender's insurance. This pays for their search fees and covers court costs if any disputes arise. Owner's insurance, on the other hand, is optional. However, it is well worth considering. This protects you in case someone comes back at you after you close on the property and claims ownership of it.

What to Ask Your Title Company

Search Tucson homes for saleYou decide which title company to use. Therefore, you may want to ask a few pertinent questions before deciding which company to go with. The first obvious question to ask is about their rates. How much do they charge? Rates vary from company to company. So, ask your Tucson REALTOR® for references. Then shop around. Next, ask the title company about their most difficult search. What made it difficult and how did they handle these issues? After that, find out how much experience the company's title insurance attorney actually has handling these cases. You want someone with experience.

Ask about their ratio of title claims to their customers. A conservative estimate (one to strive to get close to) is 5% claims per customer. A high amount (10% or more, for example) puts additional stress on the customer. Therefore, you may want to continue to look at other companies. Find out how long a search typically takes. This is especially important if you are on a strict deadline. Two weeks tends to be the average. Finally, ask what professional associations (if any) they belong to. While not required, membership in prestigious organizations such as the American Land Title Association (ALTA) shows that they make an extra effort to stay on top of current trends in the industry.

Ultimately, you decide which insurance company to go with. Therefore, the more research you do, the better of you'll be. Feel free to contact me if you have any questions or need any recommendations. I'd love to help.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate