The History of Title Insurance

The history of title insurance is quite interesting and provides a better understanding of its importance. Read on to learn more about how this valuable protection came about.

The Importance of Title Insurance and How It All Started

Although title insurance is a very important part of all real estate transactions, it was not until 1876 that the first title insurance company was created. The case of Watson v. Muirhead was one of the principal factors that prompted the creation of such insurance. This case urged lawyers and other real estate professionals to recognize the need for buyer protection in case of fraud or errors in the transaction of property.

Title Insurances Decreases the Risks of Buying a Property

Obtaining a piece land or buying real estate could be quite a risky matter before title insurance came to take place. Nowadays, we have title insurance that protects buyers and lenders in case of a discrepancy or inconsistency in the title of the property. Companies such as Patriot Title Agency, Inc. are dedicated to helping buyers protect their investment and complete safer transactions. If you are looking into buying a house or property, make sure that you are well informed and protected by a reliable title insurance company. Contact  Patriot Title Agency, Inc. today or call them at 1-866-475-3005 and learn more about title insurance.

Real Estate Before Title Insurance

Before title insurance, when a real estate transaction took place, conveyancers where the persons in charge of establishing the rights of the title to a land or property using the public records and abstracts. Ideally, the title would have to be free of liens or other rights and encumbrances before the property was released to the new buyer or before a lender provided the money for such purchase. Yet, due to the limited resources and no insurance or protection, there was still a significant risk of error and of losing the property to an unresolved problem. In the case that any of these issues created a problem, the borrower or lender would need to prove the legal negligence of the conveyancer so they could try and hold the conveyancer accountable for the damage. In most cases, this was very difficult to do.

The Case of Watson V. Muirhead

The case of Watson v. Muirhead was the perfect example of how things could go wrong even when there was a careful inspection of the property title. This case settled a problem over a property that was bought after a title record search was thoroughly completed. The transaction conveyancer had been diligent and found a lien on the title. He took this information to an attorney for professional legal verification and the attorney advised that the lien was not a valid one. Using this information, the conveyancer then continued through with the transaction so the new buyer could obtain such property. However, soon after, the property was sold at a Sheriff´s sale in order to cover the lien, which had actually been lawful. The court found that the lien and the Sheriff´s sale were in fact lawful. The conveyancer that had completed the transaction was not held responsible for the previous sale because there was no proof of negligence since he had in fact acted with diligence in seeking out the attorney's opinion. Therefore, even though the information was incorrect, the conveyance had not been negligent and the first buyer suffered the consequences, losing the investment and property.

The Verdict of the Watson v. Muirhead Case Prompted Title Insurance to Come into Existence

After this case, a group of conveyancers in Philadelphia joined together to help protect buyers by establishing a form of protecting. This is how the first title insurance company was born in 1896. It was named The Real Estate Title Insurance and Trust Company. Soon after, more and more title insurance companies were born with the same objective of protecting buyers and lenders from losses that could take place due to errors or mistakes in the title of the property.

Title Insurance and Home Buying Today

Today, title insurance is mandatory by lenders and in some cases for buyers as well, but it is always in your best interest to count with the backup of title insurance. Be sure to look into the government page for information regarding the state laws and regulations for title insurance in Ohio when purchasing a home. Also, for more first-time buyer tips and information, be sure to visit Gregg Sutter's Realty blog for advice and tips on home-buying for first timers.

Title Insurance in Canton, OH

At Patriot Title Agency, Inc. you will find expert professionals that are dedicated to protecting your investment and guiding you through this important property buying progress. Contact them today at 1-866-475-3005.