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What happens if there is a title claim against your home?

On Behalf of | Jan 28, 2022 | Real Estate

Sometimes, a property with an unusual background will have a more competitive price than other properties with similar features. The fact that a couple just went through a messy divorce or someone needs to sell their home as part of their estate can benefit you as the buyer.

You may get a better price overall because they need to sell as quickly as possible or have the opportunity to negotiate more concessions from the seller, like them making certain repairs before you take possession.

Unfortunately, one of the reasons that you may have gotten a good price was because there was the possibility of future title issues. What happens if there is a title claim against the property where you live?

You will probably have to go to court

A title claim involves someone else claiming to have an ownership interest in the property. They may have been a direct beneficiary of the estate who never received notice about probate proceedings or their inheritance. The other party may be a spouse who did not receive compensation after signing the deed during a divorce for even someone tricks with a fraudulent deed.

You will typically need to go to court and have a judge review the title history and the basis of the claim for the other party. Depending on what the judge decides, you may be able to protect your interest in the home or be at risk of losing it.

Title insurance helps those facing a title claim

When you buy a house, a title insurance premium is usually part of the price you pay at closing. You pay for a policy that protects you and a separate policy for your mortgage lender.

If someone brings a claim against title while you live there, your policy will help by covering the costs for an attorney to represent you in court. It can also reimburse you if the courts rule in favor of the other party so that you don’t lose the investment you have made in the property even if you lose possession of the home.

Understanding what happens during a title dispute can help you prepare to defend the home that you love.