Escrow & Title
A NH buyer asks their agent why they need title insurance when the title company already did a title search. The agent should explain that:
ATitle insurance duplicates the title search and is not necessary
BTitle insurance protects against defects in title that a search might not reveal, such as undiscovered forgeries, unknown heirs, or recording errors✓ Correct
CTitle insurance only covers the lender, not the buyer
DTitle searches are 100% reliable and title insurance is optional for all buyers
Explanation
Title searches review the public record but cannot discover every possible defect. Title insurance protects against title defects that a search cannot reveal: forged deeds, unknown heirs who might later claim the property, clerical errors, missing signatures on old deeds, and similar hidden defects.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Math Concepts
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