You have identified the home of your dreams, your Realtor writes the purchase contract, upon review you notice XYZ Title Agency on line 91 of the Arizona Residential Resale Real Estate Purchase Contract. You ask your Realtor: “Whats a title company, why do I need title insurance?”

Great question!

In Arizona, a Title company provides services to buyers, sellers, developers, investors builders, lenders and others who have an interest in the real estate transfer.  Title companies make sure that the transfer of title takes place efficiently and that your interests as the home buyer are protected under the terms of the title policy.

In English it means, that a title policy offers protection against claims resulting from various defects, judgements, mechanics liens, outstanding property taxes, encumbrances,  fraud, forgery, improper recording,..{Breathe}, the list unfortunately goes on and on as outlined in the policy.  Title insurance protects the lender and the homeowner against these risks.

What’s cool about title insurance is, unlike other types of insurance, title insurance does not cover future risks, it’s coverage is limited to events that are/were already in existence at the time the policy was issued.

There are 2 types of Title Insurance in Arizona

Owners Policy:

Insures the home buyers of any type of real property against loss by any reason that is listed in the policy  for as long as the buyer owns the property.  There are several versions of each policy. Consult with your Realtor/attorney to determine which policy is best for you

Lenders Policy

Insures the priority of the lender’s security interest over claims that others may have in the property.

Title Insurance insures title to a specific parcel of real property (land). In exchange for a premium, the title insurance company will assume the risk that title to a parcel of real estate is as it is stated to be. A title insurance policy indemnifies (holds harmless) the buyer (you) or the lender against losses suffered if title to the property is not as the policy states it to be.

Like any insurance policy, the title policy you receive is only as good as the title company that issued it.  Not all title companies are created the same, make sure the title company you use is financially strong and will be able to stand behind the policy if it is ever needed. Looking for a great title company in Arizona for a purchase or refinance? Contact me.

This information is believed to be accurate but is not guaranteed

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